1. Find the price to earnings (P/E) ratio, earnings per share (EPS), and dividend per share for Etsy for the last three years. Then, compare that information to its closest industry competitor (Shopify). Which of the two companies has the highest P/E ratio, EPS, and dividend per share? How do those two companies compare to its industry? (Hint: Finviz is one of many helpful resources when looking for P/E, EPS, and dividend information.)
2. Find the annual growth rate for Etsy for the last three years, as it relates to revenue % and net income %, using the year over year (YOY) data. Then, compare that information to its closest industry competitor (Shopify). Which one of the two companies has the better annual growth rate? Based on the company with the more favorable annual growth rate, as it relates to revenue % and net income %, what are the drivers to the growth? (Hint: Morningstar.com is a great resource for these growth rates. Find your stock, select Valuation, and scroll to the bottom to Key Statistics.)
3. The P/E ratio helpsinvestors determine the market value of a stock as compared to the company's earnings. A high P/E could mean that a stock's price is high relative to earnings and possibly overvalued. Conversely, a low P/E might indicate that the current stock price is low relative to earnings. Which company, as compared to its industry, is overvalued, undervalued, or perfectly priced? What data, reference, or ratios drew you to that conclusion?
4. Based on the YoY annual growth rates of revenue % and net income %, which company is growing its top line and bottom line faster? What data, reference, or ratios drew you to that conclusion?
5. Which of the two companies is the "better run company"?