Etsy stock (NASDAQ NDAQ : ETSY) has lost 7.3% in the last week, underperforming the S&P 500 (down 0.2%). Further, the same trend was observed over the last ten days (-12% vs 3.4%) and one month period (-31% vs 7.9%).
The online marketplace’s stock enjoyed a meteoric rise after the March 2020 drop, thanks to the significant jump in growth metrics like gross merchandise sales, number of active buyers, and active sellers due to the Covid-19 crisis. However, the investor sentiment toward the stock has reversed over the last six months. This was due to slower growth in the key metrics, as compared to the pandemic time and lower than expected financial guidance for the next quarter. The numbers suffered due to factors like record-high inflation figures, increase in interest rates, and soaring energy prices, which negatively affected the discretionary spending by customers. Further, the reopening of offline retail stores also impacted the growth rate of the company. Overall, the stock has lost roughly 61% YTD.
The company recently released its first-quarter results, beating the consensus estimates. It posted total revenues of $579.3 million – up 5% y-o-y. The total GMS grew 3.5% to $3.25 billion, while the Etsy ETSY marketplaces’ GMS decreased 2% to $2.8 billion. Further, the net income decreased 40% y-o-y to $86.1 million, mainly led by expenses related to the acquisition of Depop and El07.
Now, is ETSY stock set to drop further, or could we expect some improvement? We believe that there is a 68% chance of a rise in Etsy stock over the next month (21 trading days) based on our machine-learning analysis of trends in the stock price over the last seven years. See our analysis on Etsy Stock Chance of Rise.
We estimate Etsy‘s valuation to be around $170 per share which is 49% above the current market price. This represents a P/EBITDA multiple of 23.9x for the company based on our forecast for Etsy’s EBITDA for the current fiscal year.
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Twenty-One Day: ETSY -31%, vs. S&P500 -7.9%; Underperformed market
(2% likelihood event; 68% probability of rise over next 21 days)
- Etsy stock lost 31% over the last twenty-one trading days (one month), compared to a broader market (S&P500) drop of 7.9%
- A change of -31% or more over twenty-one trading days is a 2% likelihood event, which has occurred 34 times out of 1757 in the last seven years
- Of these 34 instances, the stock has seen a positive movement over the next twenty-one trading days on 23 occasions
- This points to a 68% probability for the stock rising over the next twenty-one trading days
Ten Day: ETSY -12%, vs. S&P500 -3.4%; Underperformed market
(12% likelihood event; 50% probability of rise over next 10 days)
- Etsy stock decreased 12% over the last ten trading days (two weeks), compared to broader market (S&P500) loss of 3.4%
- A change of -12% or more over ten trading days is a 12% likelihood event, which has occurred 212 times out of 1768 in the last seven years
- Of these 212 instances, the stock has seen a positive movement over the next ten trading days on 106 occasions
- This points to a 50% probability for the stock rising over the next ten trading days
Five Day: ETSY -7.3%, vs. S&P500 -0.2%; Underperformed market
(15% likelihood event; 53% probability of rise over next five days)
- Etsy stock lost 7.3% over a five-day trading period ending 05/06/2022, compared to the broader market (S&P500) decrease of 0.2%
- A change of -7.3% or more over five trading days (one week) is a 15% likelihood event, which has occurred 260 times out of 1773 in the last seven years
- Of these 260 instances, the stock has seen a positive movement over the next five trading days on 139 occasions
- This points to a 53% probability for the stock rising over the next five trading days
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