We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zillow (ZG) Up 9% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for Zillow Group (ZG - Free Report) . Shares have added about 9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Zillow due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Zillow Group reported healthy second-quarter 2024 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. The company witnessed a revenue expansion year over year, backed by strong momentum in all verticals.
The company has a solid brand position in the residential real estate industry. It boasts 231 million average monthly unique users across the Zillow ecosystem of apps and sites. Zillow’s advanced technology, such as Real Time Touring, Listing Showcase, Follow Up Boss CRM and ShowingTime touring software, are gaining strong popularity among real estate agents.
Net Income
In the reported quarter, net loss on a GAAP basis was $17 million or a loss of 7 cents per share compared with a net loss of $35 million or a loss of 15 cents per share in the prior-year quarter.
On a non-GAAP basis, the company’s net income was $99 million or a gain of 39 cents per share, identical to the year-ago quarter. Non-GAAP net income for the reported quarter beat the Zacks Consensus Estimate by 8 cents.
Revenues
Quarterly net sales improved to $572 million from $506 million reported in the year-ago quarter. Healthy growth in the residential and rental segment boosted the top line. The top line surpassed the Zacks Consensus Estimate of $540 million.
Residential revenues were $409 million, up 8% year over year from $380 million reported in the year-ago quarter, backed by solid growth in Premier Agent Business. Growth in the New Construction business, expansion of Listing Showcase nationwide through ShowingTime+ and contributions from Follow Up Boss also supported net sales in this vertical.
Rental revenues in the June quarter improved 29% year over year to $117 million. More signups for multi-family properties and greater single-family listings, along with enhancement in Zillow’s Rentals marketplace to improve the renting experience, boosted revenues in this vertical.
The mortgages segment generated $34 million in revenues, up from $24 million in the year-ago quarter, driven by solid growth in purchase loan origination. However, the year-over-year increase in this segment was partially offset by a decrease in mortgage marketplace revenues.
Other Details
Gross profit for the second quarter was $442 million compared with $402 million in the prior-year quarter, with respective margins of 77% and 79%. Operating expenses for the quarter were $480 million compared with the year-earlier quarter’s tally of $469 million. Adjusted EBITDA was $134 million, up from $111 million in the year-ago quarter, driven primarily by higher-than-expected Residential revenues.
Cash Flow & Liquidity
Zillow generated $135 million in cash from operating activities in the first six months of 2024 compared with $193 million in the prior-year period. As of Jun 30, 2024, the company had $1,181 million in cash and cash equivalents with $89 million of lease liabilities, net of current portion.
Outlook
For the third quarter of 2024, Zillow expects total revenues in the range of $545-$560 million. Residential revenues are expected to be in the band of $375-$385 million. Adjusted EBITDA is forecasted to be in the range of $95 million-$110 million. Management expects double-digit revenue growth for 2024, with modest adjusted EBITDA margin expansion, primarily driven by the growth pillars.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -140% due to these changes.
VGM Scores
At this time, Zillow has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Zillow has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Zillow is part of the Zacks Internet - Services industry. Over the past month, DoorDash, Inc. (DASH - Free Report) , a stock from the same industry, has gained 1.3%. The company reported its results for the quarter ended June 2024 more than a month ago.
DoorDash reported revenues of $2.63 billion in the last reported quarter, representing a year-over-year change of +23.3%. EPS of -$0.38 for the same period compares with -$0.44 a year ago.
For the current quarter, DoorDash is expected to post earnings of $0.19 per share, indicating a change of +200% from the year-ago quarter. The Zacks Consensus Estimate has changed +8.8% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for DoorDash. Also, the stock has a VGM Score of C.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zillow (ZG) Up 9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Zillow Group (ZG - Free Report) . Shares have added about 9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Zillow due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Zillow Q2 Earnings Beat Estimates, Revenues Surge Y/Y
Zillow Group reported healthy second-quarter 2024 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. The company witnessed a revenue expansion year over year, backed by strong momentum in all verticals.
The company has a solid brand position in the residential real estate industry. It boasts 231 million average monthly unique users across the Zillow ecosystem of apps and sites. Zillow’s advanced technology, such as Real Time Touring, Listing Showcase, Follow Up Boss CRM and ShowingTime touring software, are gaining strong popularity among real estate agents.
Net Income
In the reported quarter, net loss on a GAAP basis was $17 million or a loss of 7 cents per share compared with a net loss of $35 million or a loss of 15 cents per share in the prior-year quarter.
On a non-GAAP basis, the company’s net income was $99 million or a gain of 39 cents per share, identical to the year-ago quarter. Non-GAAP net income for the reported quarter beat the Zacks Consensus Estimate by 8 cents.
Revenues
Quarterly net sales improved to $572 million from $506 million reported in the year-ago quarter. Healthy growth in the residential and rental segment boosted the top line. The top line surpassed the Zacks Consensus Estimate of $540 million.
Residential revenues were $409 million, up 8% year over year from $380 million reported in the year-ago quarter, backed by solid growth in Premier Agent Business. Growth in the New Construction business, expansion of Listing Showcase nationwide through ShowingTime+ and contributions from Follow Up Boss also supported net sales in this vertical.
Rental revenues in the June quarter improved 29% year over year to $117 million. More signups for multi-family properties and greater single-family listings, along with enhancement in Zillow’s Rentals marketplace to improve the renting experience, boosted revenues in this vertical.
The mortgages segment generated $34 million in revenues, up from $24 million in the year-ago quarter, driven by solid growth in purchase loan origination. However, the year-over-year increase in this segment was partially offset by a decrease in mortgage marketplace revenues.
Other Details
Gross profit for the second quarter was $442 million compared with $402 million in the prior-year quarter, with respective margins of 77% and 79%. Operating expenses for the quarter were $480 million compared with the year-earlier quarter’s tally of $469 million. Adjusted EBITDA was $134 million, up from $111 million in the year-ago quarter, driven primarily by higher-than-expected Residential revenues.
Cash Flow & Liquidity
Zillow generated $135 million in cash from operating activities in the first six months of 2024 compared with $193 million in the prior-year period. As of Jun 30, 2024, the company had $1,181 million in cash and cash equivalents with $89 million of lease liabilities, net of current portion.
Outlook
For the third quarter of 2024, Zillow expects total revenues in the range of $545-$560 million. Residential revenues are expected to be in the band of $375-$385 million. Adjusted EBITDA is forecasted to be in the range of $95 million-$110 million. Management expects double-digit revenue growth for 2024, with modest adjusted EBITDA margin expansion, primarily driven by the growth pillars.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -140% due to these changes.
VGM Scores
At this time, Zillow has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Zillow has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Zillow is part of the Zacks Internet - Services industry. Over the past month, DoorDash, Inc. (DASH - Free Report) , a stock from the same industry, has gained 1.3%. The company reported its results for the quarter ended June 2024 more than a month ago.
DoorDash reported revenues of $2.63 billion in the last reported quarter, representing a year-over-year change of +23.3%. EPS of -$0.38 for the same period compares with -$0.44 a year ago.
For the current quarter, DoorDash is expected to post earnings of $0.19 per share, indicating a change of +200% from the year-ago quarter. The Zacks Consensus Estimate has changed +8.8% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for DoorDash. Also, the stock has a VGM Score of C.