Etsy And CMG Look Expensive, But Could Outperform

Etsy And CMG Look Expensive, But Could Outperform

UKRAINE - 2020/03/17: In this photo illustration an Etsy logo seen displayed on a smartphone. (Photo ... [+] Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)



SOPA Images/LightRocket via Getty Images



Stocks with expanding valuation multiples (Price-to-Earnings or Price-to-Sales) are typically seen as pricey. However, very often this could also be an indicator that a company is building a competitive advantage in the business it operates in, implying that earnings growth could be stronger going forward. We've picked a group of 11 stocks from a variety of industries including Etsy (NASDAQ: ETSY), Chipotle Mexican Grill (NYSE: CMG), MSCI (NYSE: MSCI), and Paycom Software (NYSE: PAYC) that have seen improving fundamentals (revenue and margins growth) as well as rising valuation multiples. See our complete dashboard analysis Trefis Theme: Story Stocks for the detailed list of tickers, and more information on our methodology. Part of the analysis is summarized below.



Etsy ($13 billion market cap, 440% Return since Dec 2017) has carved out a niche for itself in the e-commerce space, focusing on handmade products, vintage items, and craft supplies, fending off competition from the likes of Amazon Handmade marketplace. The company still has a lot of room for growth.