Please ensure Javascript is enabled for purposes of website accessibility

Why Zillow Group Rose by Over 9% on Friday

By Eric Volkman – May 8, 2020 at 6:15PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company's Zillow Offers express home-sale service continues to be a hit.

What happened

Both share classes of Zillow Group (Z 3.04%) (ZG 3.07%) blew past the market on Friday. Gains were to be expected, as the online real estate broker posted beats on both the top and bottom lines in Q1 results published after trading hours on Thursday.

Happy family in front of house with SOLD sign.

Image source: Getty Images.

So what

For the quarter, Zillow's total revenue rose 148% on a year-over-year basis to nearly $1.13 billion. The company's generally accepted accounting principles (GAAP) net loss deepened to $163 million, from the year-ago shortfall of almost $68 million. On a non-GAAP (adjusted), per-share basis the Q1 2020 deficit was $0.25.

On average, analysts were estimating $1.0 billion on the top line and an adjusted per-share net loss of $0.33.

Zillow's growth was powered by a dramatic increase in the take for its Homes segment, in particular, the Zillow Offers express home-sale and buying service. Zillow Offers is quickly becoming an important earner for the company; its revenue rose almost 500% to more than $769 million in Q1. That was 68% of total company revenue for the period.

Now what

In March, Zillow pulled its full-year guidance and has only offered piecemeal forecasts for the current quarter. All in all, though, it's bullish about its proximate future. In the earnings release, it said that it's learned that "real estate is resilient as we're seeing clear signals that people are still shopping for homes and want to move."

 

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Zillow Group (A shares) and Zillow Group (C shares). The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Zillow Group, Inc. Stock Quote
Zillow Group, Inc.
ZG
$29.51 (3.07%) $0.88
Zillow Group, Inc. Stock Quote
Zillow Group, Inc.
Z
$29.48 (3.04%) $0.87

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.