Zillow (Z) Showing Signs Of A Dead Cat Bounce Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Zillow ( Z) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Zillow as such a stock due to the following factors:

  • Z has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $159.3 million.
  • Z has traded 143,270 shares today.
  • Z is up 3.3% today.
  • Z was down 10% yesterday.

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More details on Z:

Zillow, Inc. engages in the operation of a real estate and home-related information marketplace on mobile and the Web in the United States. Z has a PE ratio of 476.2. Currently there are 7 analysts that rate Zillow a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Zillow has been 1.2 million shares per day over the past 30 days. Zillow has a market cap of $2.7 billion and is part of the financial sector and real estate industry. The stock has a beta of 1.24 and a short float of 50.2% with 3.54 days to cover. Shares are down 0.9% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Zillow as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from the ratings report include:
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, ZILLOW INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ZILLOW INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ZILLOW INC swung to a loss, reporting -$0.38 versus $0.19 in the prior year. This year, the market expects an improvement in earnings ($0.44 versus -$0.38).
  • The gross profit margin for ZILLOW INC is currently very high, coming in at 93.44%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, Z's net profit margin of 4.65% significantly trails the industry average.
  • Net operating cash flow has significantly increased by 91.48% to $18.76 million when compared to the same quarter last year. In addition, ZILLOW INC has also vastly surpassed the industry average cash flow growth rate of 12.10%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 394.5% when compared to the same quarter one year prior, rising from $0.55 million to $2.72 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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