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What's in Store for Zillow Group (ZG) This Earnings Season?

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Zillow Group, Inc. (ZG - Free Report) is slated to report first-quarter 2021 results on May 4.

The Zacks Consensus Estimate for earnings per share has been steady at 24 cents in the past 30 days. In first-quarter 2020, Zillow Group had reported non-GAAP loss per share of 25 cents.

Zillow Group expects first-quarter revenues in the range of $1.069-$1.112 billion. The Zacks Consensus Estimate for revenues is pegged at $1.1 billion, which indicates a decline of 2.2% from the year-ago quarter’s reported figure.

Zillow Group, Inc. Price and EPS Surprise

 

Zillow Group, Inc. Price and EPS Surprise

Zillow Group, Inc. price-eps-surprise | Zillow Group, Inc. Quote


The company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of 69.04%, on average.

Factors to Note Ahead of Q1

Zillow Group’s first-quarter performance is likely to reflect continued strength in Mortgage and Internet, Media & Technology (IMT) segments. Zillow Group’s digital capabilities like Zillow 3D Home technology that facilitate virtual home tours for Zillow-owned homes and virtual consultations from the company’s broker and Premier Agents are likely to have positively impacted the top line in the first quarter.

Mortgage segment’s first-quarter revenues are expected to be driven by improvement in mortgage technology platform. Revenues in this segment are forecast between $59 million and $64 million. The Zacks Consensus Estimate for revenues in the Mortgage segment is pegged at $62 million, indicating year-over-year growth of 145%.

Increasing customer traffic and connections in premier agents along with healthy partner retention and improving partner demand across the company’s marketplace businesses are likely to drive top line for IMT segment. For the IMT segment, management expects to first-quarter revenues in the range of $415-$428 million.

The Zacks Consensus Estimate for IMT segment is pegged at $425 million, which suggests 28.4% increase on a year-over-year basis.

Within the IMT segment, Premier Agent revenues are expected in the range of $314-$322 million. The consensus estimates for the same is at $319 million, which calls for an increase of 31.8% year over year, at present.

Premier Agent revenue is likely to be driven by increase in traffic and healthy partner demand.

Zillow Group expects to report sequential improvement in the Homes segment owing to accelerating purchasing and reselling activity across all the 25 markets.

For the first quarter, Homes segment is expected to post revenues between $595 million and $620 million. The Zacks Consensus Estimate for revenues in the Homes segment is pegged at $615 million.

However, higher spend on product development and advertising amid increasing competition is likely to have limited profitability in the to-be-reported quarter.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Zillow Group this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Zillow Group has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Vishay Intertechnology (VSH - Free Report) has an Earnings ESP of +5.22% and sports a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Qorvo (QRVO - Free Report) has an Earnings ESP of +2.4% and carries a Zacks Rank of 2, at present.

Microchip (MCHP - Free Report) has an Earnings ESP of +1.44% and currently carries a Zacks Rank of 2.

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