Zillow Shares Dive on Revenue Outlook; Company Buys Mortgage Tool Firm
Zillow shares sank in after-hours trading after the Seattle-based real estate company disappointed investors with its fourth-quarter guidance.
In Q3, Zillow recorded revenue of $31.9 million, up 67 percent over the year earlier; net income for the period totaled $2.3 million, or 7 cents a share, both in line with expectations. But the company projected Q4 revenue of $30 million to $31 million, below analysts’ estimates of $32.5 million, according to Thomson Reuters. In regular trading, shares slipped 5.3 percent, or $1.91 a share, before falling an additional 22.2 percent, or $7.62, to trade at $26.75 per share after hours.
The company also reported the acquisition of Mortech, a Lincoln, Neb.-based company that provides tools to the mortgage industry.
Zillow said it will pay about $12 million in cash and 150,000 shares of restricted stock for the 39-person company.
The acquisition of Mortech is the company’s fifth. It will become part of the company’s mortgage marketplace, where lenders provide quotes to house hunters. Last week, Zillow purchased Buyfolio, a collaborative shopping platform where home shoppers can search, track, organize and discuss listings with others.
The deal is interesting because just last month the mortgage technology provider announced that it was exclusively providing mortgage product and rate information to Trulia.com, Zillow’s close competitor.