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Will Zillow (Z) Disappoint Earnings Estimates This Season? - Analyst Blog

Online real estate information provider Zillow Inc.Z is expected to report first-quarter 2015 results on May 6. Last quarter, the company posted a negative earnings surprise of 66.67%. Let's see how things are shaping up for this announcement.

Factors at Play

Zillow offers mobile and web solutions that enable users to find important information regarding homes. We believe that the strong traffic growth, frequent product launches and the growing Premier Agent business will aid results in the to-be-reported quarter.

Moreover, the Trulia acquisition will not only make Zillow the number one online real estate information provider in the U.S., but also help it to compete against Move Inc., which has now been acquired by News Corp. NWSA .

Apart from acquisitions, Zillow entered into several partnerships with real estate listing companies and real estate brokers to enhance its product portfolio. However, the company is currently in the high investment phase and therefore, profitability might be an issue in the first quarter.

Earnings Whispers

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

Zacks ESP : Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss per share of 38 cents. Hence, the difference is 0.00%.

Zacks Rank: Zillow's Zacks Rank #4 (Sell).

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

Stocks to Consider

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

NV5 Holdings, Inc. NVEE , with an Earnings ESP of +10.00% and a Zacks Rank #1 (Strong Buy).

Actavis plc ACT , with an Earnings ESP of +0.78% and a Zacks Rank #2 (Buy).

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ZILLOW GROUP (Z): Free Stock Analysis Report

NEWS CORP NEW-A (NWSA): Free Stock Analysis Report

ACTAVIS PLC (ACT): Free Stock Analysis Report

NV5 HOLDING INC (NVEE): 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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