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Etsy (ETSY) Stock Sinks As Market Gains: What You Should Know

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Etsy (ETSY - Free Report) closed the most recent trading day at $140.96, moving -1.06% from the previous trading session. This change lagged the S&P 500's daily gain of 1.43%. At the same time, the Dow added 1.02%, and the tech-heavy Nasdaq gained 0.32%.

Coming into today, shares of the online crafts marketplace had gained 22.28% in the past month. In that same time, the Computer and Technology sector gained 5.48%, while the S&P 500 gained 5.65%.

Etsy will be looking to display strength as it nears its next earnings release. On that day, Etsy is projected to report earnings of $0.60 per share, which would represent a year-over-year decline of 40%. Meanwhile, our latest consensus estimate is calling for revenue of $576.87 million, up 4.76% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.35 per share and revenue of $2.8 billion, which would represent changes of -1.47% and +20.17%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Etsy. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 4.83% lower. Etsy is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Etsy has a Forward P/E ratio of 42.55 right now. For comparison, its industry has an average Forward P/E of 23.52, which means Etsy is trading at a premium to the group.

Investors should also note that ETSY has a PEG ratio of 1.46 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Services was holding an average PEG ratio of 2.4 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 197, which puts it in the bottom 23% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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