Why Zillow (Z) Could Beat Earnings Estimates Again

Zacks

Looking for a stock that might be in a good position to beat earnings at its next report? Consider Zillow, Inc. (Z), a firm in the Property Management industry, which could be a great candidate for another beat.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, Z has beaten estimates by at least 20% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, Z expected to face a loss of 39 cents per share, while it actually produced a lower loss of 30 cents per share, a beat of 23.1%. Meanwhile, for the most recent quarter, the company looked to incur a loss of 18 cents a share, when it actually saw a loss of 11 cents a share instead, representing a 38.9% positive surprise.

Thanks in part to this history, recent estimates have been moving higher for Zillow. In fact, the Earnings ESP for MGIC is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company’s earnings prospects. This is the case for Z, as the firm currently has a Zacks Earnings ESP of 20%, so another beat could be around the corner.

This is particularly true when you consider that Z has a great Zacks Rank #2 (Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. And when you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that Z could see another beat at its next report, especially if recent trends are any guide.

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