Why Is Zillow (Z) Up 2.8% Since Last Earnings Report?

Despite Zillow's (Z) shares increasing by 2.8% since its last earnings report, underperforming the S&P 500, analyst estimates have trended downward, with the consensus estimate shifting -74.42%. Zillow holds a Zacks Rank #4 (Sell), indicating expectations of below-average returns in the coming months, while competitor Alphabet (GOOGL) has gained 9% over the past month and holds a Zacks Rank #3 (Hold).

Analysis

Zillow's (Z) shares have appreciated 2.8% since its last earnings report, a performance that notably trails the S&P 500. This modest gain is overshadowed by a significant deterioration in analyst sentiment, evidenced by a substantial -74.42% downward revision in the consensus estimate over the past month. Consequently, Zillow carries a Zacks Rank #4 (Sell), indicating expectations of below-average returns in the near term and reflecting a strongly negative sentiment score of -0.8. The company's VGM Scores highlight specific weaknesses, with an F for both Momentum and Value, culminating in an overall D score, despite a B grade for Growth. In contrast, Alphabet (GOOGL), a peer in the Zacks Internet - Services industry, has demonstrated stronger momentum, gaining 9% over the same period and holding a Zacks Rank #3 (Hold) with a positive sentiment score of 0.7. Alphabet's recent financial performance was robust, with reported revenues of $76.49 billion, representing a year-over-year change of +13.2%, and an EPS of $2.81 for its last reported quarter; its consensus estimate has also seen a +0.1% upward revision in the last 30 days, supported by an A grade for its VGM Score.

Key Decisions for Investors

• Given Zillow's significant -74.42% downward revision in consensus earnings estimates and its Zacks Rank #4 (Sell), investors should exercise caution and might consider reducing exposure or avoiding new positions in Z.
• The stock's recent 2.8% gain, which underperforms the S&P 500, coupled with poor F grades for Momentum and Value, warrants close monitoring for any further deterioration or fundamental shifts before committing capital.
• Investors may wish to contrast Zillow's outlook with that of industry peer Alphabet (GOOGL), which shows stronger recent performance, a Hold rating, positive estimate revisions, and a superior VGM score, potentially offering a more favorable risk-reward profile within the Internet - Services sector.