Zillow Inc (Z): Today's Featured Diversified Services Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Zillow ( Z) pushed the Diversified Services industry lower today making it today's featured Diversified Services laggard. The industry as a whole closed the day up 0.7%. By the end of trading, Zillow fell $1.07 (-2.8%) to $37.48 on average volume. Throughout the day, 1.4 million shares of Zillow exchanged hands as compared to its average daily volume of 1.1 million shares. The stock ranged in price between $37.05-$38.61 after having opened the day at $38.55 as compared to the previous trading day's close of $38.55. Other companies within the Diversified Services industry that declined today were: Scientific Learning Corporation ( SCIL), down 16%, HMS Holdings Corporation ( HMSY), down 13.8%, Ambow Education ( AMBO), down 11.1%, and Innovaro ( INV), down 9.5%.
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Zillow, Inc. engages in the operation of a real estate information marketplace in the United States. Zillow has a market cap of $1.3 billion and is part of the services sector. The company has a P/E ratio of 391.1, below the average diversified services industry P/E ratio of 558.7 and above the S&P 500 P/E ratio of 17.7. Shares are up 74% year to date as of the close of trading on Wednesday. Currently there are three analysts that rate Zillow a buy, no analysts rate it a sell, and three rate it a hold.

TheStreet Ratings rates Zillow as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the stock itself is trading at a premium valuation.

On the positive front, Innotrac Corporation ( INOC), up 20.5%, Fortune Industries ( FFI), up 15.2%, JTH Holding Inc Class A ( TAX), up 11.1%, and China Yida ( CNYD), up 8.3%, were all gainers within the diversified services industry with United Rentals ( URI) being today's featured diversified services industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the diversified services industry could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the diversified services industry could consider ProShares Ultra Short Consumer Sers ( SCC).

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