Investors Eye Etsy and WK Kellogg After Index Exits

A recent report suggests that individual investors might find intriguing opportunities in Etsy and WK Kellogg, following their removal from the S&P 500 and Nasdaq-100. Historical trends indicate potential outperformance for stocks in similar situations, raising interest among value investors.

Date: 17-11-2024

AI Rating: 7

Earnings Per Share (EPS)

No mention of Earnings Per Share (EPS) was made in the report.

Revenue Growth

Revenue growth was addressed in relation to Etsy, which experienced over 100% growth during the pandemic but saw growth slow to single digits in the past year. The company grew its revenue by 4% in its most recent quarter, despite a challenging environment.

Net Income

No details about Net Income were included in the report.

Profit Margins (Gross, Operating, Net)

For WK Kellogg, the report highlighted a projected improvement in EBITDA margins to mid-teens by 2026. It's currently guiding for an adjusted EBITDA margin of 10.5% through the first three quarters of 2024.

Free Cash Flow (FCF)

Etsy's current valuation is based on a Price-to-Free Cash Flow (FCF) ratio of 11 times, indicating strong cash flow generation at a low valuation. With a FCF margin of 22%, Etsy has significant capacity for share buybacks, thus creating investor value.

Return on Equity (ROE)

No information regarding Return on Equity (ROE) was provided in the report.

Rating Summary

The overall tone of the report is cautiously optimistic about the potential turnaround of Etsy and WK Kellogg, suggesting they may be undervalued assets within the market that could provide competitive returns for investors willing to hold long-term.

Stocks: ETSY KLG