Zillow Stock (Z/ZG): Why The Price Increased Today

By Amit Chowdhry ● Dec 3, 2021
  • The stock price of Zillow Group (NASDAQ: Z) (NASDAQ: ZG) increased by over 5% during intraday trading today. This is why it happened.

The stock price of Zillow Group (NASDAQ: Z) (NASDAQ: ZG) increased by over 5% during intraday trading today. Investors are responding positively to the company providing an update about its iBuying operations today.

Zillow Group said that it made significant progress in winding down Zillow Offers inventory and has sold, is under contract to sell, or has reached an agreement on disposition terms for more than 50% of the homes it expected to resell during the entire wind-down process. And Zillow Group’s Board of Directors has also authorized the repurchase of up to $750 million of its Class A common stock, Class C capital stock, or a combination of both.

The company had announced its plan to wind down Zillow Offers operations and provided an outlook for the fourth quarter on November 2, 2021. And with the current wind-down progress, the company is updating its Q4 2021 Homes segment revenue outlook to a range of $2.3 billion to $2.9 billion from $1.7 billion to $2.1 billion.

The company is continuing to expect the net impact of the Zillow Offers wind-down of inventory (including inventory losses), operating costs, and restructuring costs in the aggregate, to be at least cash-flow neutral, including after repaying all Zillow Offers secured debt, which was $2.9 billion as of Sept. 30, 2021.

The share repurchase program — which has been approved by Zillow Group’s Board of Directors — allows for repurchases of up to $750 million of the Company’s Class A common stock, Class C capital stock, or a combination of both. The timing and the actual number of shares repurchased will be determined by management depending on a variety of factors, including stock price, trading volume, market conditions, and other general business considerations.

KEY QUOTES:

“We are pleased with the progress of our wind-down efforts and recognize that no longer operating Zillow Offers will allow us to have a more capital-efficient balance sheet and business moving forward. With that, we see today as an opportune time to announce a share repurchase program and reduce the cash balance we built up to support Zillow Offers.”

— Zillow Group co-founder and CEO Rich Barton

“We are pleased with the significant Zillow Offers inventory wind-down progress we’ve made in such a short time. We will continue to be disciplined in our inventory wind-down strategy and evaluate a variety of options to best optimize net cash flows to the company.”

— Zillow Group CFO Allen Parker

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.