Shares of Zillow Group, Inc. (NASDAQ: Z)(NASDAQ: ZG) have climbed 27.5% so far in 2017, according to data provided by S&P Global Market Intelligence, following a strong quarterly earnings report from the online real estate portal company.
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Interestingly, Zillow stock was actually trading flat year to date through the middle of April, when it began to rise as investors seemingly speculated good things to come ahead of its formal first-quarter earnings release in early May.
Sure enough, there was little not to like about that report when it arrived; Zillow's quarterly revenue climbed 32.2% year over year to $245.8 million -- significantly above guidance for $232 million to $237 million -- and adjusted net income swung to $21.9 million, or $0.11 per share, compared to a net loss of $22.8 million, or $0.13 per share in the same year-ago period.
Zillow's strength was broad-based as well. Premier Agent revenue climbed 30.3% to $175.3 million, "other" real estate revenue rose 93.3% to $34.8 million, and mortgages revenue jumped 23.2% to $20.3 million. Each was significantly above the high ends of Zillow's respective guidance ranges. Meanwhile, monthly active users climbed 6.7% year over year to 166.6 million, including an all-time high of almost 180 million in March.
Zillow also increased its full-year guidance, calling for revenue of $1.05 billion to $1.65 billion and adjusted earnings before interest, taxes, depreciation, and amortization (EBTIDA) of $215 million to $230 million.
If that weren't enough, Zillow shares followed by rising another 11.3% in June, both as Zillow's StreetEasy business added compelling new MLS partners, and as its Bridge Interactive segment struck a new alliance to improve Black Knight Financial Services' Paragon MLS system.
All things considered, it's clear that Zillow and its subsidiaries are enjoying incredible momentum and playing a central role in the real estate industry's migration to online sources. Assuming Zillow Group can sustain that momentum going forward, I see no reason the stock won't continue rewarding shareholders in kind.
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