NASDAQ:ETSY: a strong growth stock preparing for the next leg up?.

Exploring Growth Potential: ETSY INC (NASDAQ:ETSY) and Its Base Formation. Growth investors seek promising revenue and EPS growth, and ETSY INC has come under our scrutiny for potential growth investing. While it's crucial to do your own research, we've detected ETSY INC on our screen for growth with base formation, suggesting it merits a closer look.

Assessing Growth for NASDAQ:ETSY

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:ETSY boasts a 8 out of 10:

• The Earnings Per Share has grown by an impressive 139.20% over the past year.
• ETSY shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 30.26% yearly.
• The Revenue has been growing by 35.41% on average over the past years. This is a very strong growth!
• Based on estimates for the next years, ETSY will show a very strong growth in Earnings Per Share. The EPS will grow by 31.85% on average per year.
• Based on estimates for the next years, ETSY will show a quite strong growth in Revenue. The Revenue will grow by 10.70% on average per year.

Unpacking NASDAQ:ETSY's Health Rating

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:ETSY has received a 7 out of 10:

• Looking at the Altman-Z score, with a value of 2.63, ETSY is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
• ETSY has a debt to FCF ratio of 3.59. This is a good value and a sign of high solvency as ETSY would need 3.59 years to pay back of all of its debts.
• Looking at the Debt to FCF ratio, with a value of 3.59, ETSY is in the better half of the industry, outperforming 69.70% of the companies in the same industry.
• ETSY has a Current Ratio of 2.21. This indicates that ETSY is financially healthy and has no problem in meeting its short term obligations.
• ETSY's Current ratio of 2.21 is fine compared to the rest of the industry. ETSY outperforms 72.73% of its industry peers.
• ETSY has a Quick Ratio of 2.21. This indicates that ETSY is financially healthy and has no problem in meeting its short term obligations.
• ETSY has a better Quick ratio (2.21) than 81.82% of its industry peers.

Looking at the Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:ETSY has earned a 7 out of 10:

• Looking at the Return On Assets, with a value of 11.45%, ETSY belongs to the top of the industry, outperforming 87.88% of the companies in the same industry.
• ETSY's Return On Invested Capital of 13.92% is amongst the best of the industry. ETSY outperforms 84.85% of its industry peers.
• ETSY had an Average Return On Invested Capital over the past 3 years of 13.53%. This is above the industry average of 10.55%.
• The 3 year average ROIC (13.53%) for ETSY is below the current ROIC(13.92%), indicating increased profibility in the last year.
• With an excellent Profit Margin value of 11.19%, ETSY belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
• ETSY's Operating Margin of 12.66% is amongst the best of the industry. ETSY outperforms 84.85% of its industry peers.
• With an excellent Gross Margin value of 69.85%, ETSY belongs to the best of the industry, outperforming 87.88% of the companies in the same industry.

How do we evaluate the setup for NASDAQ:ETSY?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NASDAQ:ETSY currently has a 7 as setup rating:

ETSY has a bad technical rating, but it does show a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 72.85. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 67.96, a Stop Loss order could be placed below this zone.

More Strong Growth stocks can be found in our Strong Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of ETSY

Check the latest full technical report of ETSY for a complete technical analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.