Zillow Group Inc. shares jumped after the company reported quarterly revenue that beat estimates, helped by a better-than-expected period for its core advertising business.
Shares climbed as much as 17% to $54.68 in after-market trading Wednesday. The stock later pared gains and was up 3.5% to $48.27 at 5:06 p.m. in New York.
Zillow, which makes money by connecting its massive audience of
The company's core marketing business, Premier Agent, beat analyst expectations, even as revenue from that business declined 20% from a year earlier. And while traffic to the company's websites and apps was unchanged from the fourth quarter of 2021, Zillow got a boost from its rental business, where monthly web traffic for apartment properties increased 20% from a year earlier.
Zillow is a "rare internet brand that's effectively a verb," said Tom White, an analyst at D.A. Davidson, said in an interview with Bloomberg Television. "We think that franchise is very stable."
Despite a slower housing market, Zillow is entering 2023 on firmer footing, having jettisoned an expensive bet on home-flipping to focus on its core business. Chief Executive Officer Rich Barton has now set his sights on developing a "super app" for housing to simplify the consumer experience. As part of that effort, Zillow is banking on its ability to help would-be buyers tour properties and line up mortgage financing.
The company's also making a new play to reach home sellers by partnering with former competitor Opendoor Technologies Inc. in Atlanta and Raleigh, North Carolina.
Barton said in a letter to shareholders that housing
"We aren't out of the woods yet when it comes to the macro economy and how it may affect the real estate industry," Barton said in the letter. "Things continue to be foggy."
