Zillow and Trulia slip; Benchmark worried about Zillow's Q4

Benchmark (Buy, $105 PT) thinks Zillow (Z -1.6%) could miss the firm's Q4 revenue forecast of $56M (Thomson Reuters consensus is at $56.1M) on account of moderating traffic growth.

Benchmark believes Zillow's Y/Y traffic growth has slowed considerably from an August level of 75%. However, it thinks the company's margins, which have been pressured by aggressive sales/marketing investments, could be better than expected in Q4.

Both Zillow and Trulia (TRLA -2.4%) are selling off. Benchmark's note comes less than a week after RBC upgraded Zillow and Trulia to Outperform, while citing strong user/subscription growth and mobile momentum (among other things).

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Comments (2)
  • chicagomary
    , contributor
    Comments (417) | Send Message
    didn't like the action in $Z yesterday;sold 75% but did buy back a little today;I have been impressed by management when I have listened to CC.
    9 Jan 2014, 12:18 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2964) | Send Message
    Slowing traffic is a big problem for Zillow. Realtors will only continue to subscribe to the site if they see results from advertising their listings on Zillow. Perhaps the stock is ahead of itself. The PE ratio is ridiculous. It's a good site, but needs to show more earnings & get that PE ratio to a decent level. This is an internet site for buyers (and sellers) to get info on the housing market in their town. So how is this a 3 billion dollar business??? As far as I can see, not much growth left here.
    27 Jan 2014, 10:46 AM Reply Like
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