Analyst Predicts Weak Backdrop For Etsy Stock

The stock is down more than 36% over the last 12 months

Deputy Editor
Jan 10, 2024 at 9:08 AM
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Goldman Sachs downgraded Etsy Inc (NASDAQ:ETSY) to "neutral" from "buy," sending it 1.7% lower before the opening bell. According to the bear note, the analyst predicted that tighter consumer discretionary spending will result in a weaker backdrop for the e-commerce concern. Analysts are split on ETSY, leaving plenty of room for additional downgrades; 13 of the 26 covering brokerages carry a "buy" or better rating.

Meanwhile, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), calls have almost doubled puts during the last 10 weeks. The stock's 50-day put/call volume ratio of 1.74 sits higher than 85% of all other readings from the last year, indicating this rate of put buying relative to call buying is very unusual. 

These options are reasonably priced at the moment, too, per Etsy stock's Schaeffer's Volatility Index (SVI) of 44%, which ranks in the 19th percentile of its annual range. This means options traders are pricing in low volatility expectations at the moment. 

On the charts, the security touched its lowest level since April 2020 on Nov. 11. While it has recovered from that rut, ETSY just moved back below its 40-day moving average, and will look towards a familiar floor at the $75 area to save today's pullback. Year over year, Etsy stock is down 36.5%.


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