Is Zillow About to Tank Like Other High-Beta Stocks?

NEW YORK (TheStreet) -- After the close Wednesday, real estate information company Zillow (Z) will report its latest results.

Zillow is expected to post a loss. In a market environment where companies hitting profit marks are experiencing large stock price slides, the prospects for Zillow do not look good.

Current analyst estimates call for Zillow to report a loss per share of 8 cents vs. earnings per share of 1 cent posted in the year-ago report. Sales are expected to grow to $63.2 million, for a 62% growth rate. That sounds great, but it's the lowest quarterly growth rate since the company went public.

A look at the Zillow chart shows serious downside risk to the 200-day moving average, currently at $85.70. Zillow saw this area a mere week ago when the stock fell from $102.50 to $86.87 in one trading session.

Price drops of $15 to $20 occur with regularity for Zillow stock, and today's earnings report is likely to kick off the latest drop. A break below $85 puts the next support zone for Zillow at $70 to $77. A breakout would occur on a move above $111.35, an unlikely scenario in today's market environment.

With high-beta growth stocks seeing their shares hammered in recent weeks, Zillow has seen its stock price trade to new all-time highs.

Today's report may finally take the shine off this bloated tech stock if the action in other high-flying stocks such as Twitter (TWTR) or Zulily (ZU) have proven in recent days. In Tuesday's earnings report Zulily beat and raised its guidance for the year -- yet the stock shed 17%.

Tomorrow may see Zillow finally join the recent tank party seen in many other over-valued stocks.

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At the time of publication, the author owned Twitter but held no positions in any of the other stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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