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Why Zillow Shares Got Crushed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Zillow (NASDAQ: ZG  ) got crushed today by as much as 11% after the company announced earnings results

So what: Revenue in the first quarter hit a new record of $39 million. That top line beat expectations of $37.4 million, and earnings per share were better than expected. Zillow lost $0.11 per share, which was better than the  $0.13 per share in red ink that investors were expecting. However, Goldman Sachs downgraded shares from "buy" to "neutral," which likely added pressure to the stock today.
Now what: The increased expenses this past quarter were related in part to acquisitions made at the end of 2012, which required increased investments in marketing and operating costs. Share-based compensation was also up. And on the bright side, Zillow boosted its full-year outlook and now expects revenue in the range of $178 million to $182 million.

Interested in more info on Zillow? Add it to your watchlist by clicking here.

Editor's note: Many analysts expected Zillow to lose $0.13 per share rather than the $0.03 per share mentioned in a previous version. The Fool regrets the error.

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Evan Niu

Evan is a Senior Technology Specialist at The Motley Fool. He was previously a Senior Trading Specialist at a major discount broker. Evan graduated from the University of Texas at Austin, and is a CFA charterholder.

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