Is It Time To Short Zillow Group, Inc. (ZG)?

Zillow Group, Inc (ZG) Information Technology – Internet, Software & Services | Reports August 4, After Market Closes

Zillow Group, Inc. (ZG) 2Q Earnings – Key Takeaways

  • The Estimize consensus is looking for a 6 cents loss per share on $206.97 million in revenue, 3 cent lower than Wall Street on the bottom line and right in line on top
  • Enhancements to the mobile platform has been key to driving strong traffic growth and user engagement
  • Zillow is currently in a high investment and spending phase which will likely hurt profitability for the near future
  • What are you expecting for ZG? Get your estimate in here!

Zillow Group is scheduled to report second quarter earnings tomorrow after the market closes. The online real estate database is coming off a mixed first quarter which saw earnings fall short of expectations and revenue beat. This isn’t anything new for Zillow though. Over the past 3 quarters earnings have dropped by over 100% while sales have jumped by double digits. Expectations for this upcoming quarter are relatively in line with past performance.

The Estimize consensus is looking for a 6 cents loss per share on $206.97 million in revenue, 3 cent lower than Wall Street on the bottom line and right in line on top. Per share estimates have dropped 36% since Zillow’s last report, reflecting the belief that the company can’t turn a profit. Compared to a year earlier earnings are expected to fall by 444% while revenue is anticipated to increase by 20%. Fortunately the market has reacted well to the mixed results as shares are up 50% since the start of the year.

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The biggest initiatives coming out of the Zillow camp have been expanding its mobile presence. Mobile is not only one of the fastest growing sectors but it also creates a new layer of potential revenue. The app now enables users to more easily find important information about prospective homes. These efforts, plus frequent product launches, are driving strong traffic growth and user engagement.

Meanwhile the acquisition of Trulia makes Zillow the largest online real estate agent in the United states, allowing it to better compete against Move. Partnerships with traditional brokers have also helped enhance its product portfolio. At its current pace of investing and spending, investors shouldn’t expect the company to turn a profit anytime soon.

Zillow Group, Inc. (ZG)

Do you think ZG can beat estimates? There is still time to get your estimate in here!