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What's in the Cards for Zillow Group (ZG) in Q4 Earnings?

Zillow Group, Inc.ZG is set to release fourth-quarter 2016 earnings on Feb 7. In the last quarter, the company reported a positive earnings surprise of 250.00%. We note that the company delivered negative earnings surprises in two of the last four quarters, with an average negative earnings surprise of 49.78%.

Shares of Zillow have outperformed the broader Zacks Internet Services industry over the last one year. While the industry gained 8.3%, the stock gained a decent 83.0%.

Let's see how things are shaping up for this announcement.

Factors to Consider

Zillow provides real estate and home-related brands on the web and mobile. The company focuses on home lifecycle which includes renting, buying, selling, financing and home improvement.

In Nov 2016, Zillow introduced video walkthroughs to enable renters have a 360 degree view of the rental listings. This move is expected to positively impact the conversion rates and hence have a favorable impact on the company's bottom line.

However, macroeconomic factors, a competitive landscape and increasing mortgage interest rates remain concerns for the company may weigh on its performance in the soon-to-be reported quarter.

For fourth-quarter 2016, management expects revenues in a range of $218 million to $233 million. Premier Agent revenues are projected in a range of $161 million to $163 million. Display revenues are anticipated to be in a range of $14 million to $15 million.

Earnings Whispers?

Our proven model does not conclusively show that Zillow is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.

Zacks ESP: Zillow's Earnings ESP is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 3 cents per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Zillow carries a Zacks Rank #3, which when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Zillow Group, Inc. Price and EPS Surprise

Zillow Group, Inc. Price and EPS Surprise | Zillow Group, Inc. Quote

Stocks to Consider

Here are some companies that, as per our model, that have the right combination of elements to post an earnings beat this quarter:

Applied Optoelectronics AAOI with an Earnings ESP of +15.87% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

ACI Worldwide ACIW with an Earnings ESP of +1.89% and a Zacks Rank #3.

Applied Materials AMAT with an Earnings ESP of +6.06% and a Zacks Rank #3.

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ACI Worldwide, Inc. (ACIW): Free Stock Analysis Report

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Applied Materials, Inc. (AMAT): Free Stock Analysis Report

Zillow Group, Inc. (ZG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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