Trade-Ideas LLC identified Zendesk ( ZEN) as a "dead cat bounce" (down big yesterday but up big today) 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 $20.5 million.
  • ZEN has traded 121,517 shares today.
  • ZEN is up 5% today.
  • ZEN was down 11.6% yesterday.

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More details on ZEN:

Zendesk, Inc., a software development company, provides software as a service customer service platform for organizations. Currently there are 7 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 860,400 shares per day over the past 30 days. Zendesk has a market cap of $1.9 billion and is part of the technology sector and computer software & services industry. Shares are down 19.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Zendesk as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

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.
  • ZEN has underperformed the S&P 500 Index, declining 12.26% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • 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.

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