Online retail sensation Etsy‘s (ETSY) sales and profits soared last year as stay-at-home mandates and layoffs led people to seek other revenue sources, like selling home-crafted goods. Etsy’s platform brings together makers and sellers of home-crafted goods with retail buyers. The novel concept made its site a huge success. And on Wednesday, the Relative Strength (RS) Rating for Etsy stock rose to 73, up from 70 the day before.
That’s a good but not great Relative Strength Rating. It shows that Etsy stock has outperformed 73% of all stocks over the past year. The best stocks typically have an RS Rating of at least 80 as they begin their biggest climbs. The question now is, after a period of exceptional growth, can Etsy demonstrate renewed price strength and clear that threshold?
Etsy Stock’s Roller Coaster Ride
Etsy stock shot up from a Covid crash intraday low 29.95 in late March 2020 to a 251.86 high in early March this year. But as vaccinations rose, Covid began to retreat and people returned to full-time jobs. Etsy fell to 153.59 in mid-May. It’s trying to mount another stage of growth and on Wednesday it traded at 214.22, up 0.4% for the day.
Among other key ratings, Etsy has a strong 85 EPS Rating, on a 1-99 scale with 99 tops. Like its RS Rating, Etsy stock’s overall Composite Rating is well above average but not as high as CAN SLIM investors like to see. The Composite Rating contains five other ratings: EPS, Relative Price Strength, Accumulation/Distribution, Sales+Margins+ROE and Industry Group. The best growth stocks have a Composite of 90 or higher.
In terms of fundamentals, Etsy’s earnings last quarter shrank 9% year over year to 68 cents per share, vs. an exceptional same quarter a year ago. Earnings grew 483%, 332% and then 900%-plus the prior three quarters. Sales last quarter rose 23% to $528.9 million. That followed sales growth of 128%, 129% and 141% the prior three periods. Look for the next report on or around Oct. 28.
Etsy stock is trying to complete a consolidation with a 251.96 entry. See if it can break out in heavy volume.
When looking for the best stocks to buy and watch, keep a close on eye on relative price strength.
This proprietary rating tracks market leadership by using a 1 (worst) to 99 (best) score that indicates how a stock’s price action over the last 52 weeks matched up against all other stocks.
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