Trade-Ideas LLC identified Vonage Holdings ( VG) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Vonage Holdings as such a stock due to the following factors:

  • VG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.3 million.
  • VG has traded 831,390 shares today.
  • VG is down 3.2% today.
  • VG was up 7.6% yesterday.

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More details on VG:

Vonage Holdings Corp. provides communications services connecting people through cloud-connected devices worldwide. VG has a PE ratio of 4. Currently there are 6 analysts that rate Vonage Holdings a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Vonage Holdings has been 1.8 million shares per day over the past 30 days. Vonage has a market cap of $935.1 million and is part of the technology sector and telecommunications industry. The stock has a beta of 0.46 and a short float of 4.5% with 2.86 days to cover. Shares are down 18.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Vonage Holdings as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.8%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $46.11 million or 47.25% when compared to the same quarter last year. In addition, VONAGE HOLDINGS CORP has also modestly surpassed the industry average cash flow growth rate of 46.25%.
  • The current debt-to-equity ratio, 0.56, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.47 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry. The net income has significantly decreased by 39.2% when compared to the same quarter one year ago, falling from $5.60 million to $3.41 million.
  • 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. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, VONAGE HOLDINGS CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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