Zillow Group Third-Quarter Results Highlighted by Completion of the Trulia Integration

Narrow-moat Zillow reported positive third-quarter results reflecting continued success in penetrating the $10 billion online real estate advertising market. Revenue from continuing operations increased 18% from the year-ago period to $167 million, and adjusted EBITDA advanced 51% to $30 million. Diluted GAAP earnings per share amounted to a loss of $0.15, compared with a loss of $0.13 in the year-ago quarter. Initial 2016 guidance calls for accelerating revenue growth but flattish adjusted EBITDA margins as Zillow focuses more on top-line growth than margin expansion. We are maintaining our $33 per share fair value estimate, as the company appears to have ample runway in gaining share of the real estate advertising market.