ETSY Inc Scores 54% in Growth Investor Model Amid Concerns

A report highlights ETSY Inc’s performance under the Growth Investor model, revealing strong revenue growth but significant concerns in earnings growth metrics and debt levels.

Date: 11-10-2024

AI Rating: 5

ETSY Inc has been rated 54% under the Growth Investor model, which emphasizes growth stocks showing constant accelerating earnings and sales growth with reasonable valuations and low debt. While ETSY shows strong metrics in terms of P/E ratio, revenue growth relative to earnings per share (EPS), sales growth, and the current quarter earnings, several major red flags remain.

Currently, ETSY Inc has failed to meet expectations in key areas such as:

Positive Earnings Growth Rate for Current Quarter: FAIL
Earnings Growth Rate for the Past Several Quarters: FAIL
EPS Growth for Current Quarter Must Be Greater Than Prior 3 Quarters: FAIL
EPS Growth for Current Quarter Must Be Greater Than the Historical Growth Rate: FAIL
Earnings Persistence: FAIL
Total Debt/Equity Ratio: FAIL

While the long-term EPS growth has passed, the concerning aspects of earnings persistence and the significant debt-to-equity ratio could negatively impact investor sentiment. Investors typically favor companies with a strong balance sheet and consistent earnings growth, as these factors are indicative of a company's ability to navigate market challenges.

This mixed assessment could lead to volatility in ETSY’s stock prices, as prospective investors may weigh these concerns against the positive sales growth narrative.

Stocks: ETSY