Ahead of the Bell: Zillow slumps on outlook
NEW YORK (AP) — Wall Street analysts that follow Zillow stuck buy the online real estate company after a disappointing revenue outlook for the final quarter sent shares plunging.
Shares fell 16 percent before the opening bell Tuesday after its third-quarter earnings report late Monday.
Zillow reversed its loss from the same period last year, but said that it expects revenue of $30 million to $31 million for the current quarter, and that number fell shy of the $32.5 million that Wall Street was looking for.
While analysts say they are not happy about the way the year is ending, most say Zillow is on track for a strong 2013.
"While the stock likely sells off following disappointing guidance, we believe the long-term outlook for Zillow remains positive," said James Dobson of Benchmark Research.
Dobson maintained a buy rating but given the company's outlook, lowered his price target from $44 to $40.
Citigroup reiterated its 'buy' rating. Analyst Neil Doshi said that Zillow "represents an early-stage, high-risk investment in online real estate with early leadership position, a robust organic traffic base, and a differentiated content offering."
Shares of Zillow Inc., based in Seattle, $5.44 to $28.93 in premarket trading.