Zillow (Z) Stock Drops 13% After Surprise Loss and Weak Guidance

TLDR

• Zillow stock fell 12.7% Thursday after reporting a surprise Q2 net loss of $4 million despite beating revenue estimates at $772 million.
• Q3 revenue guidance of $745M-$760M came in below the $774M analyst consensus.
• Zillow cut over 500 jobs, logging $36 million in restructuring costs in Q2.
• Bernstein downgraded the stock to Market-Perform, cutting its price target from $50 to $38.
• The revenue shortfall is partly tied to a model shift where agents pay Zillow after a home sale closes, creating timing lags.

Zillow stock was trading down 12.7% Thursday morning, putting it on track for its worst single-day drop since February, after the company posted a surprise net loss and guided lower for the third quarter.

Zillow Group, Inc. Class C, Z

Zillow reported a Q2 net loss of $4 million on revenue of $772 million. Analysts had expected a $21 million profit. On a per-share basis, Zillow lost two cents versus the nine-cent gain the Street was looking for.

Revenue was up 18% year over year, and adjusted EBITDA came in at $176 million, ahead of the $162 million estimate. Adjusted earnings of 52 cents per share also beat the 45-cent consensus.

… Continue reading the full article at the original source below.