Etsy Current Financial Leverage

ETSY -  USA Stock  

USD 221.09  5.19  2.40%

Etsy's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. Etsy's financial risk is the risk to Etsy stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
Continue to the analysis of Etsy Fundamentals Over Time.

Etsy Bonds 

 
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Etsy Total Debt is fairly stable at the moment as compared to the past year. Etsy reported Total Debt of 1.12 Billion in 2020. Debt Non Current is likely to rise to about 1.2 B in 2021, whereas Debt Current is likely to drop slightly above 7.5 M in 2021.

Etsy Current Financial Burden

Etsy's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Etsy's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Etsy Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Etsy's stakeholders.

Asset vs Debt

Equity vs Debt

For most companies, including Etsy, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Etsy Inc the most critical issue when dealing with liquidity needs is whether the current assets are properly aligned with its current liabilities. If not, management will need to obtain alternative financing to ensure that there are always enough cash equivalents on the balance sheet in reserve to pay for obligations.
Given that Etsy's debt-to-equity ratio measures a company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Etsy is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of Etsy to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Etsy is said to be less leveraged. If creditors hold a majority of Etsy's assets, the company is said to be highly leveraged.

Etsy Quarterly Debt to Equity Ratio

5.2Share
Given the importance of Etsy's capital structure, the first step in the capital decision process is for the management of Etsy to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Etsy Inc to issue bonds at a reasonable cost.

Etsy Financial Leverage Rating

Etsy Inc bond ratings play a critical role in determining how much Etsy have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Etsy's borrowing costs.
Overall Bond Rating
Not Rated
Average S&P Rating
N/A
Piotroski F Score
7  Strong
Beneish M Score

Etsy Inc Debt to Cash Allocation

As Etsy Inc follows its natural business cycle, the capital allocation decisions will not magically go away. Etsy's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors. Many companies eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
The company currently holds 2.32 B in liabilities with Debt to Equity (D/E) ratio of 4.38, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. Etsy Inc has a current ratio of 6.48, suggesting that it is liquid enough and is able to pay its financial obligations when due.

Etsy Receivables Over Time

Etsy Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Etsy uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.

Etsy Debt Ratio

    
  46.41   
It appears slightly above 53% of Etsy's assets are financed through equity. Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the Etsy's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Etsy, which in turn will lower the firm's financial flexibility. Like all other financial ratios, an Etsy debt ratio should be compared their industry average or other competing firms.
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Etsy Inc Historical Liabilities

While analyzing the current debt level is an essential aspect of forecasting the current year budgeting needs of Etsy, understanding its historical liability is critical in projecting Etsy's future earnings, especially during periods of low and high inflation and deflation. Many analysts look at the trend in assets and liabilities and evaluate how Etsy uses its financing power over time.

Understaning Etsy Use of Financial Leverage

Etsy financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Etsy's total debt position, including all of outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Etsy assets, the company is considered highly leveraged. Understanding the composition and structure of overall Etsy debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it.
Please read more on our technical analysis page.
Last ReportedProjected for 2021
Total Debt1.1 B1.2 B
Debt Current8.5 M7.5 M
Debt Non Current1.1 B1.2 B
Issuance Repayment of Debt Securities493.1 M532 M
Long Term Debt to Equity 1.49  1.61 
Debt to Equity Ratio 2.24  1.97 
Etsy, Inc. operates two-sided online marketplaces that connect buyers and sellers primarily in the United States, the United Kingdom, Germany, Canada, Australia, France, and India. Etsy, Inc. was founded in 2005 and is headquartered in Brooklyn, New York. Etsy operates under Internet Retail classification in the United States and is traded on NASDAQ Exchange. It employs 1598 people.

Etsy Investors Sentiment

The influence of Etsy's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Etsy. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.

Current Sentiment - ETSY

Etsy Inc Investor Sentiment

Most of Macroaxis users are currently bullish on Etsy Inc. What is your opinion about investing in Etsy Inc? Are you bullish or bearish?
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98% Bullish
2% Bearish
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Pair Trading with Etsy

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Etsy position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Etsy will appreciate offsetting losses from the drop in the long position's value.

Etsy Pair Correlation

Equities Pair Trading Analysis

Correlation analysis and pair trading evaluation for Etsy and Imedia Brands. Pair trading can be used as a hedging technique within a particular sector or industry or even over random equities to generate better risk-adjusted return
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Continue to the analysis of Etsy Fundamentals Over Time. Note that the Etsy Inc information on this page should be used as a complementary analysis to other Etsy's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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When running Etsy Inc price analysis, check to measure Etsy's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Etsy is operating at the current time. Most of Etsy's value examination focuses on studying past and present price action to predict the probability of Etsy's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Etsy's price. Additionally, you may evaluate how the addition of Etsy to your portfolios can decrease your overall portfolio volatility.
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The market value of Etsy Inc is measured differently than its book value, which is the value of Etsy that is recorded on the company's balance sheet. Investors also form their own opinion of Etsy's value that differs from its market value or its book value, called intrinsic value, which is Etsy's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Etsy's market value can be influenced by many factors that don't directly affect Etsy Inc underlying business (such as pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Etsy's value and its price as these two are different measures arrived at by different means. Investors typically determine Etsy value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Etsy's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.