Zillow stock plummets as company buys mortgage lender
Zillow shares fell sharply late Monday after the company announced plans to buy a national mortgage lender and reported second-quarter revenue that fell just short of expectations.
The online home-selling platform expects to complete its acquisition of Mortgage Lenders of America by the fourth quarter, a move that will allow Zillow to offer home loans directly to consumers.
Zillow said it would continue to “support and grow” its digital marketplace of lenders that advertise on its websites. Mortgage Lenders of America originated 4,400 mortgages in 2017, according to Zillow. Overall, users submitted 23 million loan information requests through Zillow’s websites.
Terms of the deal were not disclosed.
The acquisition is Zillow’s latest move to expand beyond real estate listings. In April, Zillow announced that it planned to enter the house-flipping business, saying it will start by buying existing homes in Las Vegas and Phoenix before renovating and selling them.
Zillow, known for its namesake website as well as other brands such as Trulia and RealEstate.com, said its revenue jumped 22% year-over-year to $325 million in the latest quarter. Analysts were looking for about $326 million in revenue.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| Z | ZILLOW GROUP INC. | 42.54 | -0.79 | -1.82% |
Zillow’s net loss was $3.1 million, less than the $21.8 million that it lost in the same quarter a year ago. On an adjusted basis, the company earned 13 cents a share, beating Wall Street’s estimate of 9 cents a share.
The Seattle-based company projected $337 million to $347 million in revenue for the third quarter, less than analysts anticipated.
Shares of Zillow tumbled nearly 16% in after-hours trading.