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 0.9%. By the end of trading, Zillow fell $2.71 (-4.5%) to $57.08 on heavy volume. Throughout the day, 1,132,029 shares of Zillow exchanged hands as compared to its average daily volume of 662,700 shares. The stock ranged in price between $56.94-$60.00 after having opened the day at $59.32 as compared to the previous trading day's close of $59.79. Other companies within the Diversified Services industry that declined today were: CRA International ( CRAI), down 16.0%, CAI International ( CAP), down 10.0%, VirtualScopics ( VSCP), down 8.1% and Daegis ( DAEG), down 6.5%.
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Zillow, Inc. engages in the operation of a real estate and home-related information marketplace on mobile and the Web in the United States. Zillow has a market cap of $1.6 billion and is part of the services sector. The company has a P/E ratio of 328.6, above the S&P 500 P/E ratio of 17.7. Shares are up 113.2% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Zillow as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and premium valuation.

On the positive front, ITT Educational Services ( ESI), down 30.5%, Kelly Services ( KELYB), down 18.0%, R.R. Donnelley & Sons Company ( RRD), down 15.2% and Brink's Company ( BCO), down 10.5% , were all gainers within the diversified services industry with Visa ( V) 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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