Technical and Fundamental Short Trade Setup on Zip
Technical Analysis:
Downtrend Confirmation:
ZipRecruiter (ZIP) has been in a pronounced downtrend, with the stock price consistently trading below the 20-day moving average (20MA). This sustained bearish momentum indicates continued selling pressure.
Resistance Levels:
The stock has recently tested the resistance level around $9.05-$9.20, which aligns with the 20MA. This confluence of resistance suggests that the stock may struggle to move higher and could face further downward pressure.
Volume Analysis:
The volume profile shows higher selling volumes compared to buying volumes as the price approaches the resistance level. This pattern suggests a lack of bullish conviction and the potential for the stock to resume its downward trend.
Failed Breakout Attempts:
Several attempts to break above the $9.05-$9.20 resistance area have failed, reinforcing the strength of this resistance and indicating strong selling pressure at these levels.
Previous Support as New Resistance:
The previous support zone around $10.50 has now turned into a significant resistance level after the price broke below it and failed to reclaim it. This technical phenomenon supports a bearish outlook.
Trade Setup:
Entry Point:
Enter a short position at the current price of approximately $9.05, which is just below the confirmed resistance level.
Stop Loss:
Set a stop loss slightly above the recent resistance level, around $9.25, to manage risk in case of a breakout above this level.
Take Profit:
Use a break above the 20MA as a take-profit trigger. Given the current price action, a reasonable take-profit target would be around the recent low of $8.27 or lower, assuming the price fails to sustain above the 20MA. This setup offers a favorable risk-reward ratio, balancing potential gains against potential losses.
Fundamental Analysis
Company Performance:
ZipRecruiter has been facing challenges with revenue growth and profitability in recent quarters. The competitive job market and economic uncertainties have negatively impacted the company’s financial performance.
Market Sentiment:
Market sentiment towards ZipRecruiter remains bearish, with concerns about the company’s ability to sustain growth in a competitive industry. This sentiment is reflected in the stock’s downward trajectory.
Industry Challenges:
The broader recruitment and job market industry faces significant challenges, including economic uncertainties and shifts in employment trends. These factors have pressured ZipRecruiter’s performance, contributing to its bearish outlook.
Economic Indicators:
Broader economic indicators, such as slowing job growth and economic uncertainty, may further pressure ZipRecruiter’s stock. These macroeconomic factors support the bearish case for the stock.
Conclusion:
The technical and fundamental analysis supports a short trade setup on ZipRecruiter (ZIP) at the current price of approximately $9.05. The stock’s failure to break above key resistance levels, coupled with strong selling pressure and bearish market sentiment, indicates a high likelihood of continued downside. By entering at the current price with a stop loss at $9.25 and a take profit triggered by a break above the 20MA, this trade setup offers a balanced risk-reward ratio. Monitoring the stock’s price action and market conditions will be crucial to managing this position effectively.
ZIP trade ideas
$ZIP long - Employees are wanted everywhere - longterm tradeNote:
- NYSE: NYSE:ZIP
- Hot sector --> Employees are wanted everywhere
- Labor Demand in US is high
- TAM is good
- SMA10 and SMA20 coming together
- Fundamentals are good
- EPS are ok
- ZIP has "rule of 40" according to SaaS business
Disclaimer and Info:
- No guarantee for the correctness of information or calculations
- No advice or investment advice
- ZipRecruiter (ZIP) said on 05. Jan'22 it is planning a private offering of $500 million in senior notes due 2030
- ZipRecruiter (ZIP) Announces $100 Million Share Repurchase Program on 02. March'22
Paid Employees:
FY2020Q1: 98,500
FY2020Q2: 76,900
FY2020Q3: 89,800
FY2020Q4: 89,600
FY2021Q1: 114,700
FY2021Q2: 169,191
FY2021Q3: 169,500
FY2021Q4: 147,081
Revenue per Employee (in USD):
FY2020Q1: 1,150
FY2020Q2: 1,140
FY2020Q3: 1,146
FY2020Q4: 1,276
FY2021Q1: 1,093
FY2021Q2: 1,081
FY2021Q3: 1,255
FY2021Q4: 1,497
EPS:
FY2021Q1: 0.10
FY2021Q2: (0.55)
FY2021Q3: 0.19
FY2021Q4: 0.16
Marketing Ratio (Sales&Marketing divided by Revenue):
FY2020Q1: 70%
FY2020Q2: 32%
FY2020Q3: 41%
FY2020Q4: 37%
FY2021Q1: 51%
FY2021Q2: 62%
FY2021Q3: 53%
FY2021Q4: 55%
Rule of "40":
The "Rule of 40" ( aka . "Rule of Forty") is one of the simplest and most important SaaS and software metrics. This KPI was developed by the US-based software venture capital fund Bessemer Venture Partners.
It tries to relate the growth and profitability of a company. The revenue growth and the free cash flow margin (also (non-GAAP) operating margin or adjusted EBITDA margin) are added as a measure of profitability. If the sum of the two values results in a value greater than 40 , empirical data are used to assume that this is a very healthy company. The rule of 40 is particularly meaningful for software or subscription companies with high gross margins.
The background to the relationship is that a company that is growing rapidly but is still losing money can be just as attractive or even more attractive than a company that is profitable but only grows more slowly.
In addition, companies can often actively decide whether they want to give up profitability in order to grow even faster or save marketing costs and instead accept slow growth but deliver more EBIT .
At the same time, a situation in which a company is neither profitable nor grows significantly faster than 20% can quickly become a bad trade. Often these companies do not achieve sufficient economies of scale and operating leverage to be profitable and sustainable in the long term.
Therefore, the following applies quite casually: Either grow quickly or make a profit! If both of these don't work, the company often find itself in a dead end.
FY2021Q1: 28
FY2021Q2: 117
FY2021Q3: 131
FY2021Q4: 117
Backtesting:
Please ignore the backtesting results in this idea here.
$ZIP is giving a GREAT IPO LONG opportunity todayIPO intraday trading strategy idea
Ziprecruiter runs an online job marketplace.
The share price is rising and gonna continue this trend today.
The demand for shares of the company still looks higher than the supply.
These and other conditions can cause a rise in the share price today.
So I opened a long position from $21.60;
stop-loss — $19.23;
take-profit — 28.71/MOC price.
Do not view this idea as a recommendation for trading or investing. It is published only to introduce my own vision.
Always do your own analysis before making deals. When you use any materials, do not rely on blind trust.
You should remember that isolated deals do not give systematic profit, so trade/invest using a developed strategy.
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