The 10-second takeaway
For the quarter ended March 31 (Q1), Zillow beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share shrank significantly. GAAP earnings per share dropped to a loss.
Gross margins grew, operating margins contracted, net margins shrank.
Zillow reported revenue of $39.0 million. The 10 analysts polled by S&P Capital IQ anticipated a top line of $37.4 million on the same basis. GAAP reported sales were 71% higher than the prior-year quarter's $22.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.01. The 10 earnings estimates compiled by S&P Capital IQ forecast -$0.03 per share. Non-GAAP EPS of $0.01 for Q1 were 90% lower than the prior-year quarter's $0.10 per share. GAAP EPS were -$0.11 for Q1 compared to $0.06 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 89.4%, 410 basis points better than the prior-year quarter. Operating margin was -9.8%, much worse than the prior-year quarter. Net margin was -9.6%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $42.0 million. On the bottom line, the average EPS estimate is $0.06.
Next year's average estimate for revenue is $173.1 million. The average EPS estimate is $0.33.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 328 members out of 503 rating the stock outperform, and 175 members rating it underperform. Among 162 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 87 give Zillow a green thumbs-up, and 75 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Zillow is outperform, with an average price target of $56.90.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Zillow. The Motley Fool owns shares of Zillow. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.