(Bloomberg) -- Zillow Group Inc. surged the most in six months after the company posted quarterly revenue that beat estimates, buoyed by its online marketing and home-flipping businesses.
Zillow is juggling big changes to its business model, using advertising sales to fund a push into buying and selling homes. It sold 1,211 homes in the third quarter, generating $385 million, up from just $11 million in the same period last year.
The company posted third-quarter revenue of $745 million, exceeding the average analyst estimate of $718 million. The rapid growth of Zillow Offers, the algorithm-driven spin on home-flipping, has come with mounting losses. The company reported a net loss of $65 million, with the results weighed down by the new business. Still, investors appeared willing to focus on revenue growth in the quarter.
“The great thing about Zillow is that we have this core business that is extremely profitable,” Chief Executive Officer Rich Barton said in an interview. “That money has been fueling our really rapid growth into Zillow Offers.”
The shares jumped as much 15% to $38.74 on Friday, the biggest intraday gain since May 10. The stock had gained 7% this year through Thursday’s close, trailing the 23% gain for the S&P 500.
Zillow Gains as Results Are Heartening Despite ‘Long Road Ahead’
Premier Agent, the company’s online marketing business, generated $241 million in revenue for the quarter and has stabilized after unpopular changes led to an agent revolt last year.
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