Trade-Ideas LLC identified Zendesk ( ZEN) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Zendesk as such a stock due to the following factors:

  • ZEN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.8 million.
  • ZEN has traded 126,641 shares today.
  • ZEN is trading at 2.44 times the normal volume for the stock at this time of day.
  • ZEN is trading at a new low 3.02% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in ZEN with the Ticky from Trade-Ideas. See the FREE profile for ZEN NOW at Trade-Ideas

More details on ZEN:

Zendesk, Inc., a software development company, provides software as a service customer service platform for organizations. Currently there are 6 analysts that rate Zendesk a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Zendesk has been 699,400 shares per day over the past 30 days. Zendesk has a market cap of $2.4 billion and is part of the technology sector and computer software & services industry. Shares are up 9.1% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Zendesk as a sell. Among the areas we feel are negative, one of the most important has been weak operating cash flow.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$0.18 million or 103.51% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Software industry average. The net income has decreased by 5.6% when compared to the same quarter one year ago, dropping from -$17.92 million to -$18.93 million.
  • Compared to other companies in the Software industry and the overall market, ZENDESK INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ZENDESK INC is currently very high, coming in at 78.13%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -34.00% is in-line with the industry average.
  • ZEN 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 3.02, which clearly demonstrates the ability to cover short-term cash needs.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.