Zillow (NASDAQ:ZG) shares are down 10% after the company guided lower for the current quarter.
Zillow reported Q1 revenue of $4.26 billion, up from $1.22 billion in the year-ago period. IMT segment revenue stood at $490 million, almost in line with the estimated $489.6 million.
The company generated $363 million in Premier Agent revenue, just below the consensus projection of $365 million. Homes segment revenue stood at $3.72 billion, beating the consensus projection of $2.86 billion.
The company also cut its Q2 IMT guidance to send shares lower in premarket trading.
Morgan Stanley analyst Brian Nowak believes the “macro-driven 2Q revenue guide down is likely to fuel the debate about its growth positioning within the online/offline real estate space.”
“We believe the company needs scalable new innovation, Flex etc, to improve its agent conversion and user experience,” Nowak told clients in a note.
RBC analyst Brad Erickson lowered the price target to $50.00 per share, down from the prior $65.00.
“ZG’s dominant audience share remains our north star for our rating where we believe it has and continues to assemble the tools to generate significant growth and cash going forward, however, cycle fears will likely continue to impede stock performance for the next several quarters, in our view,” Erickson said in a note.
By Senad Karaahmetovic