Zillow Group (Z) shares tumbled 5.27% in after-hours trading on Thursday, despite the company reporting its first quarterly net profit since 2022. The stock's decline appears to be driven by softer-than-expected guidance for the second quarter, overshadowing the company's better-than-anticipated first-quarter results.
For the first quarter, Zillow posted a net income of $8 million, marking a significant turnaround from a $23 million loss in the same period last year. Revenue rose to $598 million, surpassing analyst expectations of $589 million. The company's CEO, Jeremy Wacksman, stated, "We're well-positioned to deliver sustainable profitable growth," highlighting the expansion of services and scaling of their "housing super app" across more markets.
However, investors seem to be focusing on Zillow's second-quarter outlook. The company forecasts Q2 revenue between $635 million and $650 million, with the midpoint falling below the consensus estimate of $649 million. This cautious guidance, likely influenced by recent volatility in mortgage rates and a subdued spring home-selling season, appears to be weighing on investor sentiment. Despite the near-term pressure, Zillow maintains its full-year 2025 outlook, expecting low-to-mid teens revenue growth and positive GAAP net income, signaling confidence in its long-term strategy amidst a challenging housing market.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.