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

|About: Zillow Group, Inc. (Z)|By:, SA News Editor

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).