By Sam Boughedda
Zillow (NASDAQ:Z) (NASDAQ:ZG) shares are up in early Thursday trading after the real estate marketplace topped earnings and revenue expectations.
The company's earnings per share came in at $0.21, $0.18 better than the analyst estimate of $0.03, while revenue for the quarter was $435 million versus the consensus estimate of $413.63M.
Zillow had to navigate a "slow and difficult" housing market in 2022 but said it is building momentum that will help it scale.
Mortgages segment revenue was $18M in the quarter, with rentals revenue increasing 13% year-over-year to $68M as Zillow continued to see strong traffic and growth in multifamily properties.
Zillow shares are up around 3% premarket.
Following the release, Bernstein analysts raised the firm's price target on the stock to $35 from $30, maintaining an Underperform rating. They said the company's print was "decent," but its guidance was mixed.
"Zillow's Q4 print was relatively positive vs. expectations. Revenue beat, led by the Premier Agent business, with the rest of the segments largely in line. This led to a small beat on the bottom-line as well," the analysts said in their note to investors. "However, Q1 guidance was more mixed -- revenue met the Street, while EBITDA missed notably on the back of continued reinvestment."
JMP Securities analysts maintained a Market Perform rating on the stock, telling investors the results were "strong."
"Zillow Group reported strong 4Q results beating on both the top and bottom line. The revenue beat was largely driven by Premier Agent performance, which received a benefit from a higher mix of first-time home buyers during the quarter," said the analysts. "Revenue guidance came in lighter than anticipated as macro conditions continue to create headwinds and volatility — though we believe top-line guidance was better than feared."
They added: "After ZG's +50% YTD increase, we see investor sentiment around a soft landing baked into its current valuation. We look for evidence that its new offerings in touring, finance, and seller solutions are gaining broader traction outside test markets to become more positive on the stock."