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Zillow (ZG) Outpaces Earnings and Revenue Estimates in Q2
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Zillow Group, Inc (ZG - Free Report) reported impressive second-quarter 2022 results beating both the bottom-line and top-line estimates. The strong performance was backed by incremental improvements to Zillow’s apps and sites that drove growth in the share of connections from tour requests to nearly 50%, up from 33% last year. However, share price fell post earnings release on lower guidance by the company.
Quarter Details
GAAP net income in the quarter was $8 million or an income of 3 cents per share compared with a net income of $10 million or an income of 4 cents per share in the prior-year quarter.
Adjusted net income during the quarter was 47 cents per share, beating the Zacks Consensus Estimate by 6 cents.
Revenues reported in the quarter were $1,009 million, beating the Zacks Consensus Estimate of $989 million but declining 23% from the prior-year quarter. The Home segment generated $505 million in revenues compared with $777 million in the prior-year quarter, reflecting a decline of 35%. The IMT segment generated $475 million in revenues compared with $476 million in the prior-year quarter, down 0.2%. This was because Premier Agent revenue decreased 5%, which was impacted by macro housing market factors, including interest rates, home price increases and tight inventory levels. The mortgages segment generated $29 million in revenues compared with $57 million in the prior-year quarter, reflecting a decrease of 49%.
Zillow Group, Inc. Price, Consensus and EPS Surprise
During the quarter, Zillow recorded a gross profit of $443 million compared with $538 million in the prior-year quarter, implying a decrease of 17.7%. The operating expenses during the quarter were $425 million, down 10.7% from $476 million. The adjusted EBITDA was $164 million compared with $183 million in the prior-year quarter, implying a decline of 10.4%. This was primarily due to lower adjusted EBITDA in the IMT segment.
Cash Flow & Liquidity
During the first six months of 2022, Zillow generated $4,255 million cash from operating activities against $158 million cash utilization in the prior-year period. As of Jun 30, 2022, the company had $2,181 million in cash and cash equivalents with $150 million of lease liabilities, net of current portion.
Guidance
For the third quarter of 2022, Zillow, for its IMT segment, expects a 12% year-over-year revenue decline at the midpoint of their outlook range. Within the IMT segment, the company expects Premier Agent revenues to be between $275 million and $295 million, down 21% year over year at the midpoint of its outlook range. Revenues for Mortgages segment is expected to be between $22 million and $27 million. The company expects Mortgage segment EBITDA to incur a loss of $31-$26 million based on expected market conditions and additional investments to build tools and technology for both customers and agents.
First Bancorp. (FBP - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 17.1%, on average, in the trailing four quarters. Over the past year, the stock has risen 18.2%.
Earnings estimates for the current year have moved up 16.8% since August 2021. First Bancorp operates in six segments – Commercial and Corporate Banking, Mortgage Banking, Consumer Banking, Treasury and Investments, United States Operations and Virgin Islands Operations.
Home Bancorp, Inc. (HBCP - Free Report) , sporting a Zacks Rank #1, is another key pick for investors. It delivered an earnings surprise of 15.5% in the previous quarter and a stellar earnings surprise of 26.9%, on average, in the trailing four quarters. The company specializes in providing one-to-four family first mortgage loans, home equity loans and lines, commercial real estate loans, construction and land loans, multi-family residential loans, commercial and industrial loans and consumer loans.
Earnings estimates for the current year have moved up 27.2% since August 2021.
Liberty Energy Inc. (LBRT - Free Report) has a Zacks Rank #1. The Zacks Consensus Estimate for Liberty Energy’s current-year earnings has been revised 307.7% upward since August 2021.
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Zillow (ZG) Outpaces Earnings and Revenue Estimates in Q2
Zillow Group, Inc (ZG - Free Report) reported impressive second-quarter 2022 results beating both the bottom-line and top-line estimates. The strong performance was backed by incremental improvements to Zillow’s apps and sites that drove growth in the share of connections from tour requests to nearly 50%, up from 33% last year. However, share price fell post earnings release on lower guidance by the company.
Quarter Details
GAAP net income in the quarter was $8 million or an income of 3 cents per share compared with a net income of $10 million or an income of 4 cents per share in the prior-year quarter.
Adjusted net income during the quarter was 47 cents per share, beating the Zacks Consensus Estimate by 6 cents.
Revenues reported in the quarter were $1,009 million, beating the Zacks Consensus Estimate of $989 million but declining 23% from the prior-year quarter. The Home segment generated $505 million in revenues compared with $777 million in the prior-year quarter, reflecting a decline of 35%. The IMT segment generated $475 million in revenues compared with $476 million in the prior-year quarter, down 0.2%. This was because Premier Agent revenue decreased 5%, which was impacted by macro housing market factors, including interest rates, home price increases and tight inventory levels. The mortgages segment generated $29 million in revenues compared with $57 million in the prior-year quarter, reflecting a decrease of 49%.
Zillow Group, Inc. Price, Consensus and EPS Surprise
Zillow Group, Inc. price-consensus-eps-surprise-chart | Zillow Group, Inc. Quote
Operating Details
During the quarter, Zillow recorded a gross profit of $443 million compared with $538 million in the prior-year quarter, implying a decrease of 17.7%. The operating expenses during the quarter were $425 million, down 10.7% from $476 million. The adjusted EBITDA was $164 million compared with $183 million in the prior-year quarter, implying a decline of 10.4%. This was primarily due to lower adjusted EBITDA in the IMT segment.
Cash Flow & Liquidity
During the first six months of 2022, Zillow generated $4,255 million cash from operating activities against $158 million cash utilization in the prior-year period. As of Jun 30, 2022, the company had $2,181 million in cash and cash equivalents with $150 million of lease liabilities, net of current portion.
Guidance
For the third quarter of 2022, Zillow, for its IMT segment, expects a 12% year-over-year revenue decline at the midpoint of their outlook range. Within the IMT segment, the company expects Premier Agent revenues to be between $275 million and $295 million, down 21% year over year at the midpoint of its outlook range. Revenues for Mortgages segment is expected to be between $22 million and $27 million. The company expects Mortgage segment EBITDA to incur a loss of $31-$26 million based on expected market conditions and additional investments to build tools and technology for both customers and agents.
Zacks Rank & Stocks to Consider
Zillow currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
First Bancorp. (FBP - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 17.1%, on average, in the trailing four quarters. Over the past year, the stock has risen 18.2%.
Earnings estimates for the current year have moved up 16.8% since August 2021. First Bancorp operates in six segments – Commercial and Corporate Banking, Mortgage Banking, Consumer Banking, Treasury and Investments, United States Operations and Virgin Islands Operations.
Home Bancorp, Inc. (HBCP - Free Report) , sporting a Zacks Rank #1, is another key pick for investors. It delivered an earnings surprise of 15.5% in the previous quarter and a stellar earnings surprise of 26.9%, on average, in the trailing four quarters. The company specializes in providing one-to-four family first mortgage loans, home equity loans and lines, commercial real estate loans, construction and land loans, multi-family residential loans, commercial and industrial loans and consumer loans.
Earnings estimates for the current year have moved up 27.2% since August 2021.
Liberty Energy Inc. (LBRT - Free Report) has a Zacks Rank #1. The Zacks Consensus Estimate for Liberty Energy’s current-year earnings has been revised 307.7% upward since August 2021.