Trade-Ideas LLC identified Zendesk ( ZEN) as a strong 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 $22.5 million.
  • ZEN has traded 303,755 shares today.
  • ZEN is trading at 5.91 times the normal volume for the stock at this time of day.
  • ZEN is trading at a new high 4.00% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 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 839,000 shares per day over the past 30 days. Zendesk has a market cap of $2.2 billion and is part of the technology sector and computer software & services industry. Shares are down 7.4% year-to-date as of the close of trading on Tuesday.

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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 deteriorating net income, disappointing return on equity and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • 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 Software industry. The net income has significantly decreased by 41.8% when compared to the same quarter one year ago, falling from -$19.17 million to -$27.17 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. 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.
  • ZENDESK INC's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ZENDESK INC reported poor results of -$0.99 versus -$0.95 in the prior year. This year, the market expects an improvement in earnings (-$0.31 versus -$0.99).
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • The gross profit margin for ZENDESK INC is currently very high, coming in at 78.10%. 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 -39.68% is in-line with the industry average.

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