The shares of Etsy, Inc. (NASDAQ:ETSY) and Express Scripts Holding Company (NASDAQ:ESRX) were among the active stocks of the last trading sessions. Etsy, Inc. (NASDAQ:ETSY) declined to -3.18% closing at the price of $42.99 whereas the shares of Express Scripts Holding Company (NASDAQ:ESRX) declined -0.45% with the decrease of -0.43 points closing at the price of $95.6. Etsy, Inc. has currently increase 43.78% in its stock over the period of 6-months while its rival Express Scripts Holding Company added 36.92% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Etsy, Inc. (NASDAQ:ETSY) is 7.5% while the ROI of Express Scripts Holding Company (NASDAQ:ESRX) is 19%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ETSY’s EBITDA Margin is 61.06 whereas ESRX’s is 9.14.
Both the profitability ratios suggest a mixed sentiment for Etsy, Inc. (NASDAQ:ETSY) and Express Scripts Holding Company (NASDAQ:ESRX).
EPS & Surprise Factor
Etsy, Inc. (NASDAQ:ETSY) reported $0.03/share EPS for the previous quarter where analysts were predicting an EPS to be $0.04/share Thus lagging the analyst Estimates with a Surprise Factor of -25 Percent. While, Express Scripts Holding Company (NASDAQ:ESRX) reported EPS of $2.22/share in the last quarter. The analysts projected EPS of $2.21/share depicting a Surprise of 0.5 Percent.
Taking a look at Earnings per Share, Express Scripts Holding Company tends to be beating the analyst estimates more than Etsy, Inc.. so ESRX is more profitable than ETSY.
Technical Analysis of Etsy, Inc. & Express Scripts Holding Company
Moving average convergence divergence (MACD) shows that Etsy, Inc. (NASDAQ:ETSY) is on a PRICE RELATIVITY trend While Express Scripts Holding Company (NASDAQ:ESRX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Etsy, Inc. was in BEARISH territory and Express Scripts Holding Company was in BULLISH territory.
ETSY’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While ESRX’s candle is BEARISH with LOW.
EPS Growth Rate: ETSY’s 15% versus ESRX’s 10.44%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Etsy, Inc. (NASDAQ:ETSY) is predicted at 15% while Express Scripts Holding Company (NASDAQ:ESRX) stands at 10.44%. These numbers suggest that ETSY is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of ETSY stands at 5.9 while ESRX is at 0.7 whereas the debt ratio of the prior is 0.75 while the debt ratio of the later is 0.77.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.5 for ETSY and 2.7 for ESRX which means ETSY has Hold rating whereas ESRX has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for ETSY is $51 which is 15.71% of its current price while ESRX has price target of 89.58 which is -6.72% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
ETSY currently has price to earning P/E ratio of 95.75 whereas ESRX has 8.98 while the forward P/E ratio for the prior stands at 62.3 and for the later it depicts the value of 10.02.
The price to Book P/B for ETSY is 13.87, Price to Sale is at 10.76 and for ESRX these ratios stand at 2.77 and 0.53.