NEW YORK (TheStreet) -- Shares of Zulily Inc (ZU) are taking a hit, sharply down 17.68% to $9.73 in early market trading Wednesday, after the online retailer issued weaker than expected revenue guidance for the current quarter and the year.

This morning, Citigroup cut its price target to $13 from $17 following the disappointing first quarter results and soft guidance. The firm maintained its "neutral" rating.

Analysts at Stifel downgraded shares of Zulily to "hold" from "buy," saying the company failed to transition its business model.

For the first quarter, Zulily reported a surprise profit of 1 cent per share, topping analysts' estimates for a loss of 3 cents per share, but revenue fell below estimates.

Looking ahead, the retailer issued weaker than expected revenue guidance for the current quarter and the year.

The company sees second quarter revenue of between $285 million to $300 million, below the $361.7 million analysts are expecting.

For the full year, the company guides for revenue of between $1.3 billion to $1.4 billion, also below the $1.5 billion expected by analysts.

Seattle-based Zulily is an e-commerce company that provides a selection of over 4,500 product styles offered on a typical day through various flash sales events.

The company offers merchandise primarily targeted at moms purchasing for their children, themselves and their homes. 

Separately, TheStreet Ratings team rates ZULILY INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ZULILY INC (ZU) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, weak operating cash flow and poor profit margins."

You can view the full analysis from the report here: ZU Ratings Report

ZU data by YCharts

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