Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
Etsy Inc., current price multiples
| Etsy Inc. | Amazon.com Inc. | Home Depot Inc. | Lowe’s Cos. Inc. | TJX Cos. Inc. | Consumer Discretionary Distribution & Retail | Consumer Discretionary | ||||
|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||
| Current share price (P) | $100.03 | |||||||||
| No. shares of common stock outstanding | 125,688,316 | |||||||||
| Growth rate (g) | 37.19% | |||||||||
| Earnings per share (EPS) | $3.93 | |||||||||
| Next year expected EPS | $5.39 | |||||||||
| Operating profit per share | $3.71 | |||||||||
| Sales per share | $18.53 | |||||||||
| Book value per share (BVPS) | $5.00 | |||||||||
| Valuation Ratios (Price Multiples) | ||||||||||
| Price to earnings (P/E) | 25.48 | 38.48 | 25.11 | 18.24 | 28.90 | 55.97 | 115.55 | |||
| Price to next year expected earnings | 18.57 | 32.87 | 5.16 | 4.99 | 20.92 | 42.79 | 94.14 | |||
| Price-earnings-growth (PEG) | 0.69 | 2.25 | 0.06 | 0.07 | 0.76 | 1.82 | 5.08 | |||
| Price to operating profit (P/OP) | 27.00 | 33.24 | 17.27 | 12.12 | 22.31 | 54.68 | 120.73 | |||
| Price to sales (P/S) | 5.40 | 3.57 | 2.33 | 1.52 | 2.49 | 4.03 | 10.52 | |||
| Price to book value (P/BV) | 20.00 | 7.97 | 55.99 | — | 16.75 | 19.62 | 38.88 | |||
Based on: 10-K (reporting date: 2021-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Etsy Inc., historical price multiples
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Price to Earnings (P/E) Ratio
- The price to earnings ratio exhibited significant fluctuations over the five-year period. Beginning at 37.61 in 2017, it increased sharply to a peak of 109.97 in 2018, indicating a substantial rise in investor expectations relative to earnings. In subsequent years, the ratio declined to 71.24 in 2019 and then rose slightly to 79.5 in 2020. By the end of 2021, the ratio dropped notably to 38.34, approaching the 2017 level. This pattern suggests volatility in market sentiment and earnings growth relative to share price.
- Price to Operating Profit (P/OP) Ratio
- This ratio demonstrated a consistent downward trend throughout the timeframe, starting at an exceptionally high level of 258.61 in 2017. It decreased dramatically to 113.95 in 2018 and continued dropping to 76.97 in 2019 and 65.48 in 2020, before reaching 40.62 in 2021. The steady decline points to an improving relationship between market valuation and operating profitability, possibly reflecting enhanced operational efficiency or stronger operating profit growth over these years.
- Price to Sales (P/S) Ratio
- The price to sales ratio showed considerable variability during the period. It started at 6.97 in 2017, doubled to 14.12 in 2018, then decreased substantially to 8.35 in 2019. A sharp increase to 16.09 occurred in 2020, followed by a decline to 8.12 in 2021. This oscillating pattern may indicate changing market perceptions of sales performance or shifting investor emphasis between revenue growth and profitability.
- Price to Book Value (P/BV) Ratio
- The price to book value ratio increased markedly from 7.75 in 2017 to 21.26 in 2018, suggesting a rise in market valuation relative to net asset value. It eased to 16.8 in 2019 but then surged to its highest point of 37.4 in 2020, before declining to 30.1 in 2021. Overall, the elevated ratios highlight a strong market premium over book value, possibly reflecting expectations of continued growth or intangible asset strength.
Price to Earnings (P/E)
Etsy Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 127,032,946 | 126,049,276 | 117,949,068 | 119,566,393 | 121,502,754 | |
| Selected Financial Data (US$) | ||||||
| Net income (in thousands) | 493,507) | 349,246) | 95,894) | 77,491) | 81,800) | |
| Earnings per share (EPS)2 | 3.88 | 2.77 | 0.81 | 0.65 | 0.67 | |
| Share price1, 3 | 148.94 | 220.27 | 57.92 | 71.27 | 25.32 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 38.34 | 79.50 | 71.24 | 109.97 | 37.61 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Amazon.com Inc. | 48.08 | 78.20 | — | — | — | |
| Home Depot Inc. | 24.51 | 17.38 | — | — | — | |
| Lowe’s Cos. Inc. | 22.36 | 11.96 | — | — | — | |
| TJX Cos. Inc. | 881.78 | 17.13 | — | — | — | |
| P/E Ratio, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 40.84 | 49.11 | — | — | — | |
| P/E Ratio, Industry | ||||||
| Consumer Discretionary | 39.27 | 73.74 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= 493,507,000 ÷ 127,032,946 = 3.88
3 Closing price as at the filing date of Etsy Inc. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= 148.94 ÷ 3.88 = 38.34
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a significant upward trend from 2017 to 2020, increasing from $25.32 to a peak of $220.27 in 2020. This represents a substantial growth over the four-year period. However, in 2021, the share price decreased to $148.94, indicating a notable correction or decline after the peak in 2020, but it remained well above the levels observed in 2017 through 2019.
- Earnings Per Share (EPS)
- EPS showed a steady and consistent increase throughout the entire period. Starting at $0.67 in 2017, it remained relatively flat in 2018 at $0.65 but then rose to $0.81 in 2019. This growth accelerated significantly in 2020 and 2021, reaching $2.77 and $3.88 respectively. The substantial EPS growth from 2019 onward indicates improving profitability and operational performance over these years.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio was relatively high throughout the period but fluctuated considerably. It started at 37.61 in 2017, surged dramatically to 109.97 in 2018, then decreased to 71.24 in 2019. In 2020, the P/E ratio increased again to 79.5 before falling sharply to 38.34 in 2021. The high P/E ratios in 2018 through 2020 suggest elevated market expectations for future growth during those years. The decline in 2021's P/E ratio, concomitant with a decrease in share price and strong EPS growth, may indicate a market reassessment leading to a more moderate valuation relative to earnings.
Price to Operating Profit (P/OP)
Etsy Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 127,032,946 | 126,049,276 | 117,949,068 | 119,566,393 | 121,502,754 | |
| Selected Financial Data (US$) | ||||||
| Income from operations (in thousands) | 465,732) | 424,009) | 88,761) | 74,786) | 11,896) | |
| Operating profit per share2 | 3.67 | 3.36 | 0.75 | 0.63 | 0.10 | |
| Share price1, 3 | 148.94 | 220.27 | 57.92 | 71.27 | 25.32 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 40.62 | 65.48 | 76.97 | 113.95 | 258.61 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Amazon.com Inc. | 64.48 | 72.85 | — | — | — | |
| Home Depot Inc. | 17.25 | 12.33 | — | — | — | |
| Lowe’s Cos. Inc. | 13.52 | 8.11 | — | — | — | |
| TJX Cos. Inc. | 137.02 | 12.69 | — | — | — | |
| P/OP Ratio, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 39.89 | 39.83 | — | — | — | |
| P/OP Ratio, Industry | ||||||
| Consumer Discretionary | 41.03 | 59.30 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Operating profit per share = Income from operations ÷ No. shares of common stock outstanding
= 465,732,000 ÷ 127,032,946 = 3.67
3 Closing price as at the filing date of Etsy Inc. Annual Report.
4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 148.94 ÷ 3.67 = 40.62
5 Click competitor name to see calculations.
- Share Price
- The share price experienced significant growth from 2017 to 2020, increasing from $25.32 to $220.27. However, in 2021, a decline occurred, bringing the price down to $148.94. Despite this decrease, the 2021 share price remained substantially higher than the levels observed in 2017 through 2019.
- Operating Profit Per Share
- Operating profit per share exhibited a consistent upward trend throughout the period. It rose from $0.10 in 2017 to $3.67 in 2021, indicating improved operational efficiency and profitability over the years. The most notable increments occurred between 2019 and 2020, and then between 2020 and 2021.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio steadily declined from an exceptionally high 258.61 in 2017 to 40.62 in 2021. This downward trend reflects an improving valuation relative to operating profit, suggesting that despite the share price drop in 2021, the valuation became more reasonable when viewed in the context of rising operational earnings per share. The substantial reduction in this ratio primarily results from the considerable increase in operating profit per share outpacing changes in share price.
Price to Sales (P/S)
Etsy Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 127,032,946 | 126,049,276 | 117,949,068 | 119,566,393 | 121,502,754 | |
| Selected Financial Data (US$) | ||||||
| Revenue (in thousands) | 2,329,114) | 1,725,625) | 818,379) | 603,693) | 441,231) | |
| Sales per share2 | 18.33 | 13.69 | 6.94 | 5.05 | 3.63 | |
| Share price1, 3 | 148.94 | 220.27 | 57.92 | 71.27 | 25.32 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 8.12 | 16.09 | 8.35 | 14.12 | 6.97 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Amazon.com Inc. | 3.41 | 4.32 | — | — | — | |
| Home Depot Inc. | 2.39 | 1.77 | — | — | — | |
| Lowe’s Cos. Inc. | 1.46 | 0.71 | — | — | — | |
| TJX Cos. Inc. | 2.48 | 1.34 | — | — | — | |
| P/S Ratio, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 2.94 | 3.23 | — | — | — | |
| P/S Ratio, Industry | ||||||
| Consumer Discretionary | 3.57 | 3.81 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Sales per share = Revenue ÷ No. shares of common stock outstanding
= 2,329,114,000 ÷ 127,032,946 = 18.33
3 Closing price as at the filing date of Etsy Inc. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= 148.94 ÷ 18.33 = 8.12
5 Click competitor name to see calculations.
The financial data reveals several key trends over the five-year period ending December 31, 2021.
- Share Price
- The share price experienced significant volatility. Beginning at $25.32 in 2017, it more than doubled by 2018 to $71.27. However, in 2019, the price declined to $57.92 before experiencing a sharp increase to $220.27 in 2020. The share price then declined to $148.94 by the end of 2021. This pattern indicates periods of rapid appreciation, followed by corrections, reflecting possible market reactions to company performance or broader economic conditions.
- Sales Per Share
- The sales per share exhibited a consistent upward trend throughout the period. Starting at $3.63 in 2017, sales per share increased steadily each year, reaching $18.33 by 2021. This represents a compound growth trend, indicating expanding revenue generation relative to outstanding shares and suggesting improving operational performance or market demand.
- Price to Sales (P/S) Ratio
- The P/S ratio demonstrated considerable fluctuation. It started at 6.97 in 2017, surged to 14.12 in 2018, then dropped to 8.35 in 2019. The ratio peaked again at 16.09 in 2020 before declining substantially to 8.12 in 2021. This variability reflects changing investor perceptions of the company’s valuation relative to its sales, possibly influenced by market sentiment, growth expectations, or profitability concerns.
Price to Book Value (P/BV)
Etsy Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 127,032,946 | 126,049,276 | 117,949,068 | 119,566,393 | 121,502,754 | |
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in thousands) | 628,619) | 742,424) | 406,634) | 400,898) | 396,894) | |
| Book value per share (BVPS)2 | 4.95 | 5.89 | 3.45 | 3.35 | 3.27 | |
| Share price1, 3 | 148.94 | 220.27 | 57.92 | 71.27 | 25.32 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 30.10 | 37.40 | 16.80 | 21.26 | 7.75 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Amazon.com Inc. | 11.60 | 17.86 | — | — | — | |
| Home Depot Inc. | 95.58 | — | — | — | — | |
| Lowe’s Cos. Inc. | 90.79 | 25.96 | — | — | — | |
| TJX Cos. Inc. | 13.68 | 9.42 | — | — | — | |
| P/BV Ratio, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 14.31 | 20.07 | — | — | — | |
| P/BV Ratio, Industry | ||||||
| Consumer Discretionary | 13.21 | 17.99 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= 628,619,000 ÷ 127,032,946 = 4.95
3 Closing price as at the filing date of Etsy Inc. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= 148.94 ÷ 4.95 = 30.10
5 Click competitor name to see calculations.
- Share Price Trend
- The share price demonstrated significant growth from 2017 through 2021, starting at $25.32 in 2017 and reaching a peak of $220.27 in 2020, before declining to $148.94 in 2021. This indicates a substantial increase in market valuation over the period, despite a notable drop in 2021 compared to the prior year.
- Book Value per Share (BVPS) Trend
- The book value per share exhibited a steady increase over the years, rising from $3.27 in 2017 to $5.89 in 2020. However, in 2021, it experienced a decline to $4.95. Overall, the trend suggests an improvement in net asset value per share until 2020, followed by a slight reduction in 2021.
- Price-to-Book Value (P/BV) Ratio Trend
- The P/BV ratio showed a marked upward trend from 7.75 in 2017 to a high of 37.4 in 2020, before decreasing to 30.1 in 2021. This pattern reflects an increasing market premium over the book value per share, indicating heightened investor expectations or market optimism until 2020, with some retraction noted in 2021.
- Overall Insights
- Across the five-year period, the financial data indicates strong growth in market capitalization relative to book value, particularly peaking in 2020. The decline in share price and P/BV ratio in 2021 suggests some moderation in market valuation or investor sentiment. The steady increase in BVPS until 2020 implies improving fundamentals, although the subsequent decrease warrants attention for potential underlying factors impacting the company’s net asset base.