Zillow Plunges 12.7% on Weak Q3 Guidance, Surprise Loss
Z is trading near its 52-week low of $29.23 (5.7% above the low).
Summary
Zillow reported a surprise Q2 net loss of $4M vs. expectations of $21M profit, driven by $36M in restructuring costs from the 500+ job cuts announced earlier this week. Revenue of $772M beat estimates, but Q3 guidance of $745M-$760M came in well below the $774M consensus, with adjusted EBITDA also light. The stock fell 12.7% in morning trading, adding to a 47% year-to-date decline. The company is shifting its agent advertising model to a 'preferred' pay-at-close structure, which boosts per-connection revenue but creates near-term revenue recognition lags. Executive changes add uncertainty: CFO Jeremy Hofmann takes on the additional COO role as Jun Choo steps down for health reasons, and a new chief legal and policy officer was hired. This follows a securities fraud lawsuit and the loss of Chicago-area listings earlier this year, compounding operational and legal headwinds.
At the time of this announcement, Z was trading at $30.90 on NASDAQ in the Real Estate & Construction sector, with a market capitalization of approximately $7.1B. The 52-week trading range was $29.23 to $93.88. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.