May 25, 2023
Top 10 Stock Etsy Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Etsy – Top 10 Stock in Employee Satisfaction Leaders in the United States
Etsy is listed as a top 10 stock on May 25, 2023 in the market index Employee Focus US because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 56 (high 56% performer), Obermatt assesses an overall buy recommendation for Etsy on May 25, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Internet Retail |
| Index | Employee Focus US, Diversity USA, NASDAQ, S&P US Luxury, S&P 500 |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment Etsy Buy
| 360 METRICS | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 34 |
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| GROWTH | ||||||||
| GROWTH | 93 |
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| SAFETY | ||||||||
| SAFETY | 50 |
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| SENTIMENT | ||||||||
| SENTIMENT | 44 |
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| 360° VIEW | ||||||||
| 360° VIEW | 56 |
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ANALYSIS: With an Obermatt 360° View of 56 (better than 56% compared with alternatives), overall professional sentiment and engagement for the stock Etsy are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Etsy. The consolidated Growth Rank has a good rank of 93, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 93% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 50 which means that the company has a financing structure that is safer than 50 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 34 which means that the share price of Etsy is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 66% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 44, which means that professional investors are more pessimistic about the stock than for 56% of alternative investment opportunities. ...read more
RECOMMENDATION: With a 360° View of 56, Etsy is better than 56% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 93), and the company is safely financed (Safety Rank of 50). However, professional market sentiment is critical (Sentiment Rank of 44). The negative market view on Etsy may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Etsy compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Etsy only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 44 (better than 44% compared with alternatives), overall professional sentiment and engagement for the stock Etsy is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Etsy. Analyst Opinions are at a rank of 49 (worse than 51% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 29 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 47, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 53% of competitors). No wonder, the Professional Investors rank is only 42, which means that professional investors hold less stock in this company than in 58% of alternative investment opportunities. Pros tend to stay away from Etsy, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 44 (less encouraging than 56% compared with investment alternatives), Etsy has a reputation among professional investors that is below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: Etsy Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 34 (worse than 66% compared with alternatives), Etsy shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for Etsy. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with an Price-to-Book Rank of 100, which means that the stock price is lower compared with invested capital than for 100% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 27 which means the stock price compared with what market professionals expect for future profits is higher than 73% of comparable companies, indicating a low value concerning Etsy's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 100 and for dividend yields which is lower than for 99% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 34, is a HOLD recommendation based on Etsy's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Etsy, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. ...read more
Growth Strategy: Etsy Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 93 (better than 93% compared with alternatives) for 2023, Etsy shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Etsy. Profit Growth has a rank of 90 which means that currently professionals expect the company to grow its profits more than 90% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 87, and Stock Returns has a rank of 77 which means that the stock returns have recently been above 77% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 46 (54% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 93, is a BUY recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Etsy Debt Financing Safety above-average
| SAFETY METRICS | May 25, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 6 |
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| REFINANCING | ||||||||
| REFINANCING | 45 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 92 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 50 |
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ANALYSIS: With an Obermatt Safety Rank of 50 (better than 50% compared with alternatives), the company Etsy has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Etsy is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Etsy. Liquidity is at 92, meaning the company generates more profit to service its debt than 92% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 45, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 55% of its competitors. Leverage is also high at a rank of 6, which means that the company has an above-average debt-to-equity ratio. It has more debt than 94% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 50 (better than 50% compared with alternatives), Etsy has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usuallyl indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Etsy Above-Average Financial Performance
| COMBINED PERFORMANCE | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 34 |
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| GROWTH | ||||||||
| GROWTH | 93 |
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| SAFETY | ||||||||
| SAFETY | 92 |
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| COMBINED | ||||||||
| COMBINED | 73 |
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ANALYSIS: With an Obermatt Combined Rank of 73 (better than 73% compared with investment alternatives), Etsy (Internet Retail, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Etsy are low in value (priced high) with a consolidated Obermatt Value Rank of 34 (worse than 66% of alternatives). But they show above-average growth (Growth Rank of 93) and are safely financed (Safety Rank of 50, which means below-average debt burdens). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 73, is a buy recommendation based on Etsy's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Etsy exhibits low value (Obermatt Value Rank of 34), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 93). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 50) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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