Zillow Group Inc. (Z) shares plunged 12.55% in after-hours on Tuesday, November 02, 2021, and closed the daily trading at $76.26. Even in the regular trading session, Z’s stock lost 10.24%. Z shares have fallen 2.20% over the last 12 months, and they have moved down 8.66% in the past week. Over the past three months, the stock has lost 20.17%, while over the past six months, it has declined 23.37%.
Let’s see what could be the reason behind its recent loss?
Zillow recent financial results
On November 2, 2021, Zillow Group, Inc. (Z and ZG), reported consolidated financial results for the three months ended September 30, 2021.
Q3 2021 financial highlights
- Zillow reported total revenue of $1.7 billion for Q3 2021 compared to $656.7 million in Q3 2020.
- Total operating expenses were $522 million in Q3 2021 compared to $336 million in the same period a year ago.
- It suffered a net loss of $328 million in Q3 2021 compared to a net loss of $39.5 million in Q3 2020.
- Adjusted EBITDA was negative $169 million in Q3 2021 compared to negative $152.18 in Q3 2020.
- As of September 30, 2021, the company had cash and investments of $3.2 billion and debt of $4.4 billion.
Q4 2021 Financial outlook
For Q4, 2021, the company is expecting
- Total revenue in the range of $2.2 billion to 2.6 billion.
- Adjusted EBITDA in the range of $ negative 186 million to negative $136 million.
Zillow wind down home buying and selling business
With the financial results, Zillow Group announced to shut down its homebuying and selling the business, citing the company’s inability to accurately predict future home prices. The company will lay off 25% of its workforce.
Zillow had to close the business after an unprecedented home-buying spree that saw the internet-based real-estate-services company buy more than 14,000 homes in just six months. Only after that spree did Zillow executives realize that they had overspent, and were sitting on massive losses in the months to come.
Zillow first Interactive Virtual Haunted House
On October 28, 2021, Zillow posted the creepiest listing for Halloween. The mansion at 667 Dead End Drive comes to life on an interactive 3D Home tour sure to frighten and delight those brave enough to enter this fictional house of horrors. Those brave souls then search for clues about the demise of its former owner, who still haunts the home today.
The poor Q3 2021 financial results and shutting down the home business were the reason behind its plummeting on Tuesday and it can further slide down in the coming trading sessions as well.