Zillow (Z) Stock: Weak On High Volume 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 weak on high relative volume 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 $149.2 million.
  • Z has traded 557,228 shares today.
  • Z is trading at 8.31 times the normal volume for the stock at this time of day.
  • Z is trading at a new low 4.05% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on Z:

Zillow, Inc. operates real estate and home-related information marketplaces on mobile and the Web in the United States. The company owns and operates Zillow.com. Currently there are 4 analysts that rate Zillow a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Zillow has been 1.5 million shares per day over the past 30 days. Zillow has a market cap of $4.1 billion and is part of the financial sector and real estate industry. The stock has a beta of 1.48 and a short float of 41.3% with 6.92 days to cover. Shares are up 49.1% 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 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 solid stock price performance. However, as a counter to these strengths, we find that net income has been generally deteriorating over time.

Highlights from the ratings report include:
  • Z's very impressive revenue growth exceeded the industry average of 43.6%. Since the same quarter one year prior, revenues leaped by 67.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Z has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 7.95, which clearly demonstrates the ability to cover short-term cash needs.
  • ZILLOW INC has improved earnings per share by 13.3% 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 ($0.38 versus -$0.38).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength 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.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Internet Software & Services industry average. The net income has decreased by 2.4% when compared to the same quarter one year ago, dropping from -$10.23 million to -$10.48 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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