Zillow Group (Z) - Get Report zoomed higher on Friday after the online real-estate buying and selling platform posted earnings and revenue that beat analysts’ forecasts and raised its full-year outlook, prompting at least two price-target upgrades from analysts.
Zillow reported third-quarter earnings of 37 cents a share, excluding some items, on revenue of $657 million. Analysts polled by FactSet had expected per-share earnings of 12 cents on revenue of $572 million in revenue.
For the fourth quarter, Zillow said it expects sales of $709 million to $748 million, above the average $682.6 million expected by analysts.
The company pointed to a combination of record-low mortgage rates and the pandemic-driven move to working from home as the key reasons behind its best quarter ever. Zillow provides inventory across the country along with technology that allows prospective buyers to shop for homes and take virtual tours.
“Many of us are re-evaluating where we live and how we live, which has kicked off a Great Reshuffling, and we need safe, digital ways to get to a better place,” said Zillow co-founder and CEO Rich Barton. “This is driving record demand for housing and record engagement with Zillow's leading digital real estate brands.”
Traffic to Zillow’s mobile apps and websites reached a record 236 million average monthly unique users during the third quarter, an increase of 21% year over year, driving 2.8 billion visits during the quarter, an increase of 32% year over year, the company said.
The company exited the quarter with the highest cash and investments balance in its history, growing cash and investments to $3.8 billion from $3.5 billion at the end of the second quarter.
Zillow’s strong results were enough to prompt at least two research houses to boost their respective outlooks.
Piper Sandler analyst Tom Champion raised his price target to $133 from $112. He left his rating on the company unchanged at overweight. Analysts at DA Davidson took the same tact, raising their one-year price target on the stock to $150 from $94.
Zillow shares were up 14.28% at $118.68 in trading on Friday. The stock has risen more than fourfold since mid-March.