(Bloomberg) -- Zillow Group Inc. was flying high last February, when the red-hot U.S. housing market helped push its share price north of $200 and a “Saturday Night Live” skit cemented the company's place in the pandemic zeitgeist.
Housing is still hot a year later, but Zillow isn't. Chief Executive Officer Rich Barton shocked the real estate world in November when he pulled the plug on his company's tech-powered home-flipping operation, sending shares plummeting and adding fuel to a selloff that has wiped out more than $35 billion in market value.
Read more: Wall Street's IBuying Spree Is Eating Up Starter Homes
Now, Zillow is at a crossroads. Its website and apps draw more than 200 million unique visitors in a typical quarter, driving a profitable business selling ads to real estate agents. But after the home-flipping collapse, investors are eager to hear what's next for the most high-profile real estate company in the U.S.
Zillow reports results after the close of trading in New York on Thursday, giving Barton a chance to update investors for the first time since November.
Things to Watch
- Zillow had been buying and selling thousands each quarter but decided to exit the iBuying business, known as Zillow Offers, after a bad bet on home-price appreciation. Now, analysts are looking for clues on what Barton has planned to fuel growth. When Zillow last reported earnings, “management had limited opportunity to put a new game plan in place,” Wedbush analysts Ygal Arounian and Chad Larkin wrote in a recent research note. “We look to hear more on the specific details and vision for that model at earnings.”
- The company's shares dropped 54% last year and have continued slipping in 2022. The stock closed at $48.47 on Wednesday, a 76% plunge from a record high closing price of $203.79 on Feb. 16, 2021.
- Zillow has made steady progress exiting its iBuying operation. It has sold more than 8,900 homes since Sept. 30, according to a Bloomberg analysis of property records compiled by Attom Data Solutions. That number includes some sales that closed in January, but not transactions that are under contract but not yet closed.
- The company is expected to report a loss of roughly $177 million before interest, taxes, depreciation and amortization, according to an average of analyst estimates compiled by Bloomberg. It had posted an adjusted profit for four straight quarters before announcing the Zillow Offers shutdown. Zillow said in November that it would take writedowns of as much as $569 million on the flipping business and reduce its workforce by 25%.
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