Here’s What Led To A 26% Jump In Zillow Group’s Stock In A Month


Zillow Group (NASDAQ:Z), an American online real estate database company, which operates the largest portfolio of real estate and home-related brands on mobile and the web, focusing on all stages of the home lifecycle: renting, buying, selling and financing, has seen its stock price rise by close to 26% over the last month, driven by stronger Q3 2019 results that beat estimates on both revenues and earnings. The stock has reacted strongly, since the company actually saw a major sell-off post its Q2 results when it warned of an underwhelming outlook. However, revenue growth over Q3 was stronger-than-expected at about 117%, taking Q3 revenues to $745.2 million, much higher than analysts’ expectation of $718 million. Though Zillow started as an advertising platform, it added another segment with the launch of Zillow Offer last year, which gives home sellers the option to sell directly to Zillow, which then finds a buyer and resells the home itself. The new segment brought in $384.6 million in revenue in Q3 2019, compared to just $11 million in Q3 2018 when the business was just kicking off. Core business also saw healthy growth of 7% during the same period. Company posted adjusted loss of $0.12 per share in Q3, much better than market expectation of loss of $0.22/share. Moreover, the company is projecting robust revenue growth rates of between 116% to 126% for Q4 2019.

We ‘step back’ from these recent swings to review Zillow Group’s performance over the last few years, as a context for what might come next. View the Trefis interactive dashboard Why Did Zillow Group’s Stock Rally 26% Over The Last Month And What To Expect Going Forward? to understand the historical and expected performance for Zillow Group.

How does Zillow Group’s Revenue Growth in 2018 compare with that in prior periods and what’s the forecast?

Relevant Articles
  1. Up 50% Over The Last 12 Months, Is Hyatt Stock Still Attractive?
  2. Capital One Stock Gained 44% In The Last 6 Months, What’s Next?
  3. Up 8% Year To Date As 5G Gains Traction, What’s Next For Verizon Stock?
  4. Up 32% In The Last 12 Months, Where Is BNY Mellon Stock Headed?
  5. Rallying 30% YTD, What’s Spurring The Rally In Applied Materials’ Stock?
  6. Will UPS Stock Recover To Its Pre-Inflation Shock High of $230?

Total Revenues for Zillow Group significantly increased from $1.08 billion in 2017 to $1.33 billion in 2018; an increase of 23.8%.

This compares with Total Revenues growth of:

  • 97.8% in 2015 compared to 2014
  • 31.3% in 2016 compared to 2015
  • 27.2% in 2017 compared to 2016

We expect Total Revenues growth to be 95.7% in 2019.

How does Zillow Group’s Total Expense in 2018 compare with that in prior periods and what’s the forecast?

Total Expense for Zillow Group increased from $1.26 billion in 2017 to $1.48 billion in 2018; an increase of 17.7%.

This compares with Total Expense growth of:

  • 116% in 2015 compared to 2014
  • 33.7% in 2016 compared to 2015
  • 18.2% in 2017 compared to 2016

We expect Total Expense growth to be 95.4% in 2019.

How does Zillow Group’s EBT in 2018 compare with that in prior periods and what’s the forecast?

EBT for Zillow Group increased by 18.0% from -$184 Mil in 2017 to -$151 Mil in 2018.

We expect EBT to significantly decrease by 92.1% to -$290 Mil in 2019, driven by significant expenses related to setting up and operating a new business division, which is a lower-margin business compared to the company’s core business of being an online advertising platform

How does Zillow Group’s Net Income in 2018 compare with that in prior periods and what’s the forecast?

For more details on Zillow Group’s Net Income and EPS, view our interactive dashboard analysis.

 

What’s behind Trefis? See How it’s Powering New Collaboration and What-Ifs

For CFOs and Finance Teams | Product, R&D, and Marketing Teams

More Trefis Data

Like our charts? Explore example interactive dashboards and create your own.