The Real Deal New York

Zillow just slashed its revenue outlook

Shares of StreetEasy parent down as much as 9% in early trading

April 14, 2015 12:20PM
By Business Insider


Spencer Rascoff (credit: CBS)

Zillow is getting crushed.

Shares of the online real estate database company opened down as much as 9 percent in early trading after it lowered its revenue guidance for the year on a call with investors. Near 10:10 am ET, shares had recovered much of its losses and were down about 3 percent. Trading in shares was halted during the company’s update call. CEO Spencer Rascoff said the company expects revenue in 2015 to total $690 million, below the $750 million analysts had been expecting according to Yahoo Finance.

The company also said the lowered earnings guidance relates to its $3.5 billion acquisition of Trulia.

“The work we are doing this year lays the foundation for an incredibly bright 2016 and 2017,” Rascoff said. “However, 2015 is a transition year and we’re trending a couple quarters behind where we’d like to be, due to the protracted FTC approval process which only ended two months ago … These pro forma revenue and EBITDA estimates assume the acquisition of Trulia would have closed at the beginning of 2015.”

The company expects EBITDA in 2015 to come in at around $80-$85 million.

Shares are over 12 percent lower year-to-date.

  • Bob the Broker

    Well, well, well. Maybe this is because their information is SO inaccurate and brokers are not advertising on the site because their reputations will be tarnished. In addition, they started this new “building agent expert” for $250 a month on Streeteasy. Brokers are pissed. Only the small time guys are paying those advertising prices. When everyone gets wise they will lose even more money.

  • Chuck

    Zillow Group is being sued by Move Inc (News Corp). Up until recently, it was difficult to know
    for sure if this case had merit. A few
    days ago, a whistleblower sent an anonymous letter detailing the illegal activity
    and data theft by Zillow in an attempt to increase the accuracy of their
    product. The alleged theft took place not
    only from but also from the very agents’ personal websites who advertise
    with Zillow Group. I am not an attorney
    nor have I seen anymore evidence than anyone else, but the letter seems to go
    into a lot of detail that has me convinced that serious illegal activity took
    place. Now why would they need to steal
    data? 2 reasons: 1.
    Their data was already considered very inaccurate and outdated. 2. Listhub was the main provider of data
    (legally) for Zillow Group. That company
    (after being acquired by News Corp) decided to terminate their agreement with
    Zillow Group, putting further holes in the already inaccurate data that Zillow
    Group has.

    In fairness to Zillow Group, they have done a good job of securing
    direct feeds from some large brokerages and some MLS’s. This is imperative to their strategy because direct
    listing feeds remove data inaccuracy. They
    already dominate in web traffic, so data accuracy in all that they need. Once they have this solved, they will move
    forward with their plan to “Structurally Change the Industry” (their words not
    mine). This means that they will
    minimize the role of the agent and minimize the commissions earned by a sales
    associate. Do me a favor and research
    the exec team from Zillow Group. They
    all come from the Travel Portals. They
    did the same thing there and now travel agencies are extinct. They are incredibly smart individuals and I
    do not blame them for attempting to disrupt the industry, but there is no way
    in hell that I am going to aid them in helping to destroy my livelihood.

    Several large companies recently have the guts to pull their
    listings. It may not be favorable to the
    short term, but bold moves like this rarely are. Either others will follow the bold leaders of
    Crye Lake and William Raveis, or we will all
    go down together as an industry.

  • Ellen

    Zillow is a sick joke. Their “Zestimates” of market value of properties are based upon no credible information and the “comparables” that they use are ludicrous. For example, I have listed a seven bedroom home in Westchester yet Zillow’s “comparables” for this property include a one-bedroom co-op apartment in The Bronx! Zillow estimates monthly costs but does this absent any information about how much the purchaser is putting on the down payment and what is the mortgage rate! Zillow’s “Zestimates” cause prospective buyers to question legitimately arrived at asking prices. Zillow does more harm than good to honest brokers and sellers.