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ETSY

3 Stocks to Sell Before Earnings Season

April 03, 2026 — 12:50 am EDT

Written by

Marc Guberti for

The Motley Fool->

Key Points

- Etsy has been losing customers and profits, with its recent Depop sale acting as a white flag for what was once a promising investment.

- Nike's sales have stumbled for a while, resulting in a -2.27% CAGR over the past three years that makes a rebound look difficult.

- Tesla is transitioning into a physical AI and energy company, but declining sales and a lofty valuation make the current price look excessive.

- 10 stocks we like better than Etsy ›

Buying and holding stocks for the long run is a great strategy for building wealth over time. However, companies change, and some investments that looked solid a few years ago may turn out to be duds if you give them more time to stretch.

For instance, Kraft Heinz (NASDAQ: KHC) used to be a solid dividend stock that could outperform the stock market, but it has dropped tremendously from its all-time highs, with a full recovery looking nearly impossible.

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The stock market is filled with companies that performed well over long stretches, encountered fundamental problems, and never rebounded. These three stocks have those same risks, and it may be better to bail out on these picks before they next report earnings, rather than hoping for a rebound.

Image source: Getty Images.

Etsy

Etsy (NYSE: ETSY) seemed to do everything right in the mid-2010s and was thrust into the spotlight as a top pandemic stock. Custom face masks flooded the online marketplace and attracted customers seeking products they couldn't find on other e-commerce platforms.

Etsy initially capitalized on its pandemic-fueled growth, but the wheels fell off, resulting in an 80% drop from all-time highs. The main culprit has been decelerating gross merchandise sales, which reflects all of the sales across Etsy's platform. This figure dropped by 5.3% year over year in 2025. The figure is a little more promising in the fourth quarter if you exclude Reverb sales, and is up by 2.4% year over year with that stipulation. Etsy recently sold its Reverb segment, so it is fair to remove it from the Q4 comparison.

The company also sold its Depop business to eBay (NASDAQ: EBAY) for $1.2 billion. That's not a good look when Etsy bought the same business for $1.625 billion in 2021.

Active buyers and sellers both decreased year over year in Q4, and net income dropped along with them. While revenue was up year over year, Etsy offset a GMS slowdown with online advertising and fees. That's not a winning formula in the long run if customers and sellers keep leaving. Etsy will likely report its next quarterly earnings in mid-May.

Nike

Nike (NYSE: NKE) has been on the decline for multiple years, but some investors saw a glimmer of hope when Apple CEO Tim Cook bought 50,000 shares in the final days of 2025. Nike's CEO also loaded up on shares at the same time, and that type of insider investing made people excited.

The stock has been brought back to reality with its 31% year-to-date decline. Once heralded as a dividend growth stock, Nike has turned into a dividend income stock with its 3.6% yield, and recent developments do not suggest a rebound is on the way.

Nike has been struggling with revenue growth for a while. It has a -2.27% CAGR over the past three years, meaning the company has been actively losing market share to its competitors. That trend continued in the third quarter of fiscal 2026 (ending Feb. 28), as Nike reported flat year-over-year revenue.

The main growth engine -- wholesale revenue -- was up by 5% year over year. However, that part of the business was balanced out by a 4% year-over-year decline in Nike Direct revenue. Growth in North America was the main reason for improved wholesale revenue, but Nike has already tapped deeply into that market. China sales also dipped 7% year over year, a recurring theme for one of Nike's most important markets.

It remains to be seen if Nike can deliver long-term meaningful growth in that region, but recent revenue CAGR trends don't offer much optimism. Nike will likely release its next earnings report in late June.

Tesla

While Etsy and Nike represent lost potential, Tesla (NASDAQ: TSLA) is a risky pick going into earnings for the opposite reason. Optimus, Tesla's humanoid robots and autonomous vehicles, can potentially drive substantial sales growth, but those two catal