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Zillow Earnings Preview: Wall Street's Saying

A previous version of this article said Zillow was expected to generate $54.43 billion in revenue for the fourth quarter. It's expected to generate $54.43 million. TheStreet regrets this error.

NEW YORK (TheStreet) -- Online real estate giant Zillow (Z - Get Report) reports fourth-quarter earnings after market close, and all eyes will be focused on whether it can keep growing its traffic at a breakneck pace.

Traffic has grown exceptionally fast at Zillow, as the company has seen 11 straight months of over 50% year-over-year growth. January 2014 was one of the strongest months yet.

Shares of Zillow were higher in early Wednesday trading, gaining 1.04% to $88.40.

Earlier this month, Zillow noted January saw 70 million unique users, up 52% year-over-year, and 34% from December. Benefiting the company's results is the expansion into mobile, as Zillow's mobile initiatives dominate its competitors, including Trulia (TRLA) and others. In the January release of monthly traffic, Zillow noted it was 2.5 and 4 times the size of its two closest competitors on market share of visits.

Z ChartZ data by YCharts

Analysts surveyed by Thomson Reuters are looking for the company to earn 7 cents a share on $54.43 million in sales for the fourth quarter.

In January, Zillow announced it would expand its reach, partnering with AOL (AOL), powering the site's home shopping experience, and continuing to expand Zillow's presence in the massive online real estate market. Zillow now powers four of the top real estate sites in the country: Zillow, Yahoo! Real Estate, AOL Real Estate and HGTV's FrontDoor.com.

In addition, TheStreet is partnering with Zillow to allow additional investors and interested parties to ask Zillow questions, using social media, with the hashtag #ZEarnings on both Facebook and Twitter. I'll be conducting a satellite interview with CEO Spencer Rascoff to discuss the earnings report as well.

Going into the report, analysts are largely positive. Here's what several of them had to say on its prospects for the fourth quarter:

JMP Securities analyst Ronalod Josey (Market Outperform, $100 PT)

"We believe Zillow will report another strong quarter in terms of Premier Agent net additions, revenue, and EBITDA in what is the seasonally slowest calendar quarter. Our checks with agents suggest Zillow continues to deliver leads and is increasingly becoming a 'must buy' among agents. Some of the key items we'll be watching for this quarter include: 1) Premier Agent net additions, ARPU, & leads growth; 2) 2014 guidance with a focus on incremental marketing spend-we project an incremental $10-$20 million; 3) 4Q traffic growth and its impact on Display rev.; 4) Progress in monetizing rentals and the addition of a sales force; and 5) Adoption from Zillow's co-marketing program with lenders."

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Goldman Sachs analyst Heath Terry (Hold, $80 PT)

"We expect revenue of $55.2mn and adjusted EBITDA of $8.6mn, both below consensus and near the bottom of the guidance range.

According to comScore, Zillow desktop traffic growth moderated to +40.3% in Q4 from +50.9% in Q3, while mobile traffic growth accelerated to +231% in Q4, up from +226% in Q3.

While Zillow traffic growth outpaces revenue growth, we believe the company may be able to bridge this gap as it monetizes adjacent businesses."

--Written by Chris Ciaccia in New York

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