Why Zulily Inc Shares Jumped Today

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Zulily Inc  were back in style today, climbing as much as 11% after scoring an upgrade from Goldman Sachs.

So what: The volatile flash-sales retailer got bumped up to buy from neutral, as Goldman said Zulily's "hyper growth warrants attention." Indeed, revenue at the website, which targets new moms, grew by 87% in its most-recent quarter as the flash-sales model, which offers deep discounts for a limited time, has proven to be immensely popular. Goldman also noted that the company is on its way to becoming only the third retailer in U.S history to hit $1 billion in its five years of operations, the other two being Amazon.com and Old Navy.  

Now what: Goldman Sachs is one of the country's most-respected financial institutions, and when its analysts upgrade a stock, the move gets attention. Investors, however, shouldn't heed its advice blindly. Zulily shares have been extraordinarily volatile since its $22 IPO in November, peaking at $73 in February before tumbling 30% on a weak earnings report in May. Shares are now near $40 after today's jump. Clearly, Zulily is one of the more exciting companies to come on the market recently, but the company is barely profitable despite the sharp revenue increases. If its sales growth keeps up, the stock should jump in tandem, but investors should expect a wild ride.

Leaked: This coming device has every company salivating
The best investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There is a product in development that will revolutionize not just how we buy goods, but potentially how we interact with the companies we love on a daily basis. Analysts are already licking their chops at the sales potential. In order to outsmart Wall Street and realize multi-bagger returns, you will need The Motley Fool's new free report on the dream-team responsible for this game-changing blockbuster. CLICK HERE NOW.

The article Why Zulily Inc Shares Jumped Today originally appeared on Fool.com.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Goldman Sachs. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

People are Reading