Etsy, Inc. (ETSY)
Quantitative Summary
DeterministicETSY trades at 26.0x earnings, roughly in line with its sector average of 35.0x. Financial health is average: Piotroski 5/9, Altman Z 1.2. DCF fair value of $56 suggests 2% upside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of Etsy, Inc. reveal a distinct tension between operational efficiency and capital structure instability. While the company generates a positive ROIC-WACC spread of 2.2%, indicating value creation potential relative to its cost of capital, this is starkly contrasted by a negative DuPont ROE of -14.8%. This deterioration stems primarily from an equity multiplier of -2.57x, signaling significant leverage or accounting adjustments that invert the return on equity despite healthy gross margins of 71.6% and modest net margins of 5.7%. Risk metrics further complicate this picture; a low Altman Z-Score of 1.2 suggests elevated bankruptcy risk, while the negative Profitability Factor (RMW) of -0.921 highlights weak profitability trends relative to peers, even as the Beneish M-Score of -3.44 points toward low earnings manipulation concerns and a Piotroski F-Score of 5/9 indicates moderate financial strength.
Valuation metrics suggest the market is pricing in growth expectations that appear misaligned with current cash flow realities. The stock trades at a premium P/E of 37.9x compared to the sector average of 34.6x, yet this multiple supports only minimal upside according to discounted cash flow models estimating fair value at $56 with just 11.4% implied growth over ten years. This divergence is exacerbated by an implied free cash flow growth rate of -0.3%, suggesting that current earnings do not reflect sustainable expansion. The discrepancy between the high valuation multiple and near-flat or negative long-term cash flow generation implies that market sentiment may be overly optimistic regarding future scalability, a view potentially at odds with the weak profitability factor delta observed in recent performance data.
Recent insider activity adds another layer of caution to the risk-reward profile, as $7.1 million in net selling over the last 90 days indicates significant distribution by corporate insiders. This outflow coincides with negative Fama-French alpha contributions across both value (-0.143) and profitability factors (-0.921), suggesting the stock has underperformed relative to its factor exposures during this period. While the positive annualized Fama-French alpha of 4.10% hints at specific skill or timing advantages not captured by standard models, the combination of insider selling, negative long-term cash flow growth projections, and a precarious Z-Score creates an asymmetric risk environment where downside protection appears limited relative to the premium valuation currently embedded in shares.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 3% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 10% | 12% | 14% |
|---|---|---|---|
| 2% | $67 | $52 | $42 |
| 3% | $75 | $56 | $45 |
| 4% | $86 | $62 | $48 |
Center = base case. Green = >10% upside, Red = >10% downside vs $69.73.
Pre-computed DCF: WACC=12.0%, terminal growth 3%. Fair value $56 (+2.0%). Not investment advice.
Valuation Context
Currently trading 28% above its 5-year average P/E of 29.6x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedEtsy, Inc. is currently trading at $57.61 within the consumer cyclical sector, presenting a snapshot where institutional positioning may be inferred through specific technical alignments rather than explicit directional mandates. The current price level relative to its simple moving averages suggests that larger market participants might be observing key support or resistance zones without necessarily committing capital immediately. If short-term moving averages are converging with longer-term trends while volume remains subdued, this could indicate a period of consolidation where institutional players are accumulating positions quietly or waiting for clearer confirmation before adjusting their exposure. Conversely, if price action is testing these averages repeatedly with declining volume, it might signal that major holders are holding steady rather than engaging in aggressive rotation into the asset at these specific levels. The interplay between price movement and moving average crossovers often reveals whether institutional sentiment leans toward accumulation or distribution without confirming a definitive trend change yet. In this scenario, the lack of significant volume spikes accompanying current price fluctuations suggests that large capital flows are not currently driving momentum decisively in one direction. Instead, institutions may be using this range to reassess risk-reward profiles before committing substantial resources. The technical setup implies that while larger players are attentive to these structural levels, their actual deployment of funds remains ambiguous until a breakout or breakdown occurs with corroborating volume strength, allowing them to validate their market thesis based on established price behavior rather than speculative assumptions.
Quant Health Deep Dive
Profitability & Value Creation
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XRT or SLYG, the fund manager is mechanically forced to buy or sell ETSY shares regardless of Etsy, Inc.'s individual fundamentals. We estimate $369M of passive capital is structurally linked to ETSY through 8 tracked ETFs. Passive flows have a limited but growing influence on ETSY's daily trading dynamics.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Etsy, Inc. to visualize passive redemption contagion across ETFs and collateral stocks.
If Etsy, Inc. (ETSY) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies Amazon.com Inc. (AMZN) as the most exposed collateral stock, sharing 1 ETFs with ETSY. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 11 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
ETSY Ownership Dynamics
Passive funds hold 1 in every 15 ETSY shares, reducing daily market volatility.
Etsy, Inc. (ETSY) exerts measurable gravity on the passive index market, currently representing 1.6% of the XRT (XRT) and 0.7% of the SLYG (SLYG). Across 11 tracked ETFs, approximately 6M shares (6.7% of float) are held by passive funds and rarely trade on the open market. As passive ownership grows, index inclusion changes may increasingly drive price discovery.
ETFs with Highest ETSY Exposure
Float lock-up computed from 11 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
ETSY Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Etsy, Inc. over the past year sits near $54.56 (13% of 252-day volume). The current price of $69.73 trades 27.8% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target. The highly concentrated volume profile (13% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
ETSY Capital Efficiency
How efficiently does Etsy, Inc. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Etsy, Inc. converts 174% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. The positive ROIC-WACC spread of 2.3% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-14 | 640 | $57.40 | $36,736 |
| 2026-05-12 | 1,761 | $59.86 | $105,413.46 |
| 2026-05-11 | 701 | $64.38 | $45,130.38 |
| 2026-05-04 | 1,460 | $63.17 | $92,228.2 |
| 2026-05-01 | 1,728 | $64.34 | $111,179.52 |
| 2026-04-30 | 45,762 | $69.60 | $3.2M |
| 2026-04-27 | 99 | $62.79 | $6,216.21 |
| 2026-04-22 | 596 | $65.19 | $38,853.24 |
| 2026-04-21 | 225,837 | $64.18 | $14.5M |
| 2026-04-20 | 228,577 | $61.90 | $14.1M |
| 2026-04-16 | 1,713 | $57.92 | $99,216.96 |
| 2026-04-06 | 1,318 | $51.64 | $68,061.52 |
| 2026-03-25 | 53 | $49.46 | $2,621.38 |
| 2026-03-24 | 32 | $52.49 | $1,679.68 |
| 2026-03-18 | 80 | $54.92 | $4,393.6 |
| 2026-03-09 | 400 | $56.40 | $22,560 |
| 2026-03-06 | 24,528 | $56.63 | $1.4M |
| 2026-03-03 | 580 | $53.97 | $31,302.6 |
| 2026-03-02 | 8,349 | $54.88 | $458,193.12 |
| 2026-02-25 | 8,622 | $54.40 | $469,036.8 |
| 2026-02-24 | 3 | $52.37 | $157.11 |
| 2026-02-23 | 912 | $52.18 | $47,588.16 |
| 2026-02-19 | 2,845 | $44.05 | $125,322.25 |
| 2026-02-06 | 2,000 | $54.46 | $108,920 |
| 2026-02-04 | 499 | $53.29 | $26,591.71 |
| 2026-02-02 | 32 | $52.96 | $1,694.72 |
| 2026-01-30 | 18 | $54.95 | $989.1 |
| 2026-01-16 | 173 | $63.63 | $11,007.99 |
| 2026-01-15 | 94 | $61.58 | $5,788.52 |
| 2026-01-12 | 764 | $61.88 | $47,276.32 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| FIS | 0.393 | 0.470 | Moderate |
| MC | 0.372 | 0.491 | Moderate |
| TRMB | 0.370 | 0.513 | Moderate |
| MTCH | 0.350 | 0.486 | Moderate |
| PYPL | 0.344 | 0.359 | Moderate |
| HOOD | 0.337 | 0.359 | Moderate |
| SBUX | 0.332 | 0.373 | Moderate |
| GRMN | 0.332 | 0.402 | Moderate |
| GEN | 0.321 | 0.406 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare ETSY to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.