Zillow Just Proved It Doesn't Set Expectations Well
(Bloomberg) -- Zillow Group plunged 18 percent in extended trading after cutting its annual forecast for the second straight quarter.
The company now sees 2018 revenue in the range of $1.307 billion to $1.324 billion, below the lowest analyst estimates. The company cut its adjusted Ebitda view to $195 million to $207 million, well short of the $247 million analysts had expected. Zillow said in a statement that it will take time for advertisers to adapt to its new business model, which involves the buying and selling of homes and mortgages.
The stock’s reaction shows investors are growing impatient. Zillow had already plunged 16 percent after last quarter’s disappointment, and Tuesday’s after-hours trading suggests the shares could be headed for two-year low when the stock opens Wednesday. Peer Redfin Corp. fell 8.6 percent in sympathy.
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