Zillow Shares Surge as Home-Flipping Drives Quarterly Sales Beat

(Bloomberg) — Zillow Group Inc. reported third-quarter revenue that beat estimates, sending shares higher in late trading. Zillow posted revenue of $745 million, exceeding the average analyst estimate of $718 million. It got a boost from its algorithm-driven spin on home-flipping.The shares jumped as much as 13%, despite the company posting a net loss of $65 million.Key InsightsZillow is juggling big changes to its business model, including the push into buying and selling homes. The company bought 2,291 homes in the third quarter and sold 1,211, generating $385 million in its Homes segment. In the same period last year, the company reported just $11 million in Homes revenue.The rapid growth has come with mounting losses. Zillow reported an adjusted loss for the segment of $68 million before interest, tax, depreciation and amortization. Still, investors appeared willing to focus on the growth the company is generating.Zillow has also tweaked the way it sells leads to real estate agents. Premier Agent, the company’s online marketing business, generated $241 million in revenue for the quarter and has stabilized after unpopular changes led to an agent revolt. The company is testing another new marketing strategy, called Flex, in a handful of markets.Market ReactionThe shares had gained 7% this year through Thursday’s close, trailing the 23% gain for the S&P 500 Index.Get MoreTo read Zillow’s earnings statement click here.Why Zillow Went From Online Real Estate Ads to Flipping HomesTo contact the reporter on this story: Patrick Clark in New York at [email protected] contact the editor responsible for this story: Craig Giammona at [email protected] more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.