BUZZ-Zillow shares plunge due to missing Q3 expectations and weak earnings guidance

November 5 - ** Real estate platform Zillow (ZG.O) shares plunged 15.1% to $29.25 after announcing third-quarter results and fourth-quarter outlook that missed Wall Street expectations

** If the decline continues, ZG stock will post its largest single-day drop since plunging 16.5% on February 11

** The company said (link) third-quarter revenue rose 7% year-on-year to $724 million, below London Stock Exchange Group (LSEG) estimate of $754.2 million, and called this “one of the most challenging real estate markets in a generation”

** The company reported third-quarter adjusted earnings per share of 55 cents, and adjusted EBITDA of $182 million; analysts previously expected earnings per share of 59 cents and adjusted EBITDA of $193.73 million

** This quarter, its app and website traffic fell 3%, with average monthly unique users down to 215 million; quarterly visits declined 5% to 2.3 billion

** Piper Sandler lowered its price target from $46 to $39, citing ZG's fourth-quarter revenue guidance of $635 million to $665 million and adjusted EBITDA guidance of $100 million to $135 million, far below the market consensus of $711 million and $186 million

** Other brokerages also cut their price targets, including BofA from $37 to $32, and Wells Fargo from $31 to $30

** Of 27 brokerages, 13 rate the stock as “strong buy” or “buy,” and 14 rate it as “hold”; the median price target is $39.50

** Last week, ZG said it would pay $212.5 million to settle a class action lawsuit alleging it misled shareholders over a failed house-flipping project (link)

** As of Wednesday, ZG shares had fallen about 50%, compared to an approximately 11% gain in the Nasdaq index .IXIC

(To facilitate non-English speakers, Reuters has automated the translation of its reports into several other languages. Automated translation may contain errors or lack the required context, and Reuters does not guarantee the accuracy of the translation. The automated translation is provided solely for the convenience of readers. Reuters accepts no liability for any damage or loss arising from the use of this automated translation service.)