Zillow Rises Most Since May on Fourth-Quarter EarningsJohn Gittelsohn
Zillow Inc., operator of the largest real estate information website, jumped the most in eight months after reporting stronger-than-estimated fourth-quarter results as the U.S. housing market recovers.
Zillow rose 8.6 percent to $42.30, the biggest gain since May 23. The company reported fourth-quarter profit of 2 cents a share after the close of trading yesterday, compared with the break-even median estimate by 10 analysts in a Bloomberg survey. Revenue rose 73 percent from a year earlier to a record.
“Zillow has leveraged a focus on technology, particularly in mobile, to create a differentiated product,” Heath Terry, an analyst with Goldman Sachs Group Inc. in New York, said in a note today. He has a buy rating on the shares.
The Seattle-based company joined Realogy Holdings Corp., owner of the Coldwell Banker and Century 21 brokerage brands, and competitor Trulia Inc. in reporting results that indicate rising real estate demand from consumers. Realogy’s fourth-quarter net revenue climbed 30 percent from a year earlier, while transaction volume for its brokerage and franchising segments jumped 35 percent, the Parsippany, New Jersey-based company said in a statement today.
Realogy fell 2.3 percent to $45.42. The stock has gained 68 percent since Apollo Global Management LLC took the company public in October.
Trulia, based in San Francisco, climbed 5.2 percent today to $30.50, a record. It surged 22 percent yesterday after reporting a narrower fourth-quarter loss and a 75 percent jump in revenue.
Home sales and values have been rising after the worst housing slump since the Great Depression as low interest rates and declining unemployment spur more people to buy. Prices for single-family homes increased in 88 percent of U.S. cities in the fourth quarter, while the national median sales price jumped 10 percent from a year earlier for the biggest gain since 2005, the National Association of Realtors said this week.
“With more homebuyers getting off the sidelines in this persistent low-mortgage-rate environment, we remain well-positioned to benefit from the improving housing market,” Zillow Chief Executive Officer Spencer Rascoff said on a conference call with analysts yesterday.
Zillow shares have surged 52 percent this year and have more than doubled since the company’s July 2011 initial public offering. Trulia, which went public at $17 a share in September, has gained 88 percent in 2013.