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Why ZipRecruiter Stock Jumped 14% Today

By Demitri Kalogeropoulos – Nov 11, 2021 at 11:00AM

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Growth got another shot in the arm.

What happened

ZipRecruiter (ZIP 0.63%) stock jumped on Thursday, rising 14% by 11 p.m. EST. The employee recruitment specialist trounced expectations for third-quarter sales growth while projecting a strong finish to the year.

So what

Revenue came in at $213 million for the selling period that ended in late September, the company said in its earnings update. That spike marked an over 100% increase, year over year, and sailed past management's prior forecast. CEO Ian Siegel and his team had predicted in mid-August that sales would instead land between $182 million and $188 million.

The outperformance meant ZipRecruiter maintained its triple-digit growth pace rather than seeing a slow down to gains of roughly 80%. "The third quarter of 2021 was another exceptionally strong quarter for ZipRecruiter," management said in a shareholder letter.

A person conducts a video call from their home.

Image source: Getty Images.

Now what

Executives are seeing plenty of room to continue helping connect job seekers with employers while profiting from that service. Sales in 2021 are now expected to reach between $725 million and $730 million, up from the prior (upgraded) guidance calling for revenue between $651 million and $665 million.

The earnings picture received an even bigger boost, with adjusted earnings now likely to approach $100 million rather than the $35 million that executives had predicted three months ago. "We reaffirm our conviction that we are still in the early stages of building a category-defining marketplace," management said.

The improving financial trends and strong growth together imply impressive momentum for the company heading into 2021, and Wall Street rushed to catch up to the brighter outlook by pushing the stock higher on Thursday.

Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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