Zillow Group Inc. shares fell after the real estate company published a second-quarter outlook that called for lower revenue in its core business and predicted stalling growth in the
Zillow, led by Chief Executive Officer Rich Barton, expects revenue from its residential business to be between $372 million to $382 million in the second quarter, according to a shareholder
Zillow based that projection on tepid first-time home buying activity and
Shares plummeted as much as 12% to $36.63 before paring losses in after-market trading Wednesday at 4:55 p.m. in New York. Shares had fallen 27% from the start of the year through Wednesday's close, before earnings were released.
Zillow's disappointing outlook comes as the company reported first-quarter earnings that beat analysts' expectations. The company's dominant consumer brand helped it muddle through a period of slow sales and looming changes in the US housing industry. Zillow had revenue of $529 million, more than the $509 million analysts estimated, on average, in a survey compiled by Bloomberg.
Zillow continues to attract eyeballs even as home sales and available listings remain near historic lows. About 217 million unique users visited the company's websites and apps on the average month in the quarter. The company, whose main business revolves around connecting prospective homebuyers with real estate agents, reported $125 million in adjusted earnings before interest, taxes, depreciation and amortization, beating the average analyst estimate of $104 million.
The residential real estate industry has been jolted in recent months by antitrust litigation that seeks to upend a decades-old status quo. In March, the National Association for Realtors agreed to a
Zillow is positioned to thrive amid industry changes because of its large audience of high-intent homebuyers, and because it caters to the most-productive agents, Barton and Chief Financial Officer Jeremy Hofmann said in a letter to shareholders Wednesday.
