Zillow Group shares surged after the company posted revenue that beat estimates, fueled by its core business selling leads to real estate agents.
The stock jumped as much as 11% to $60.82 in late trading on Wednesday, with investors looking beyond mounting losses in the company’s nascent home-flipping operation. The fast-growing business, known as Zillow Offers, bought 1,787 homes in the fourth quarter and sold 1,902, generating $603 million in revenue for the segment, according to a statement.
Zillow co-founder Rich Barton reclaimed the chief executive officer job last year to lead the company’s ambitious pivot into buying and selling homes. It’s an expensive operation: The company lost an average of about $6,400 on every home it sold in the quarter, after interest. Overall, the Seattle-based company posted a $101 million net loss for the quarter.
Its revenue was $944 million, a jump of 158% compared with a year earlier.
“It’s a dramatic expansion of our ambition as we move down to the transaction — from search and find to buy, rent and borrow,” Barton said in an interview. “All that while, during all that transition, we just printed a two-and-a-half times revenue increase year-over-year for the quarter.”