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What happened 

Shares of Zillow Group (Z -1.59%) (ZG -1.99%) were sliding today after the company reported its second-quarter results. While its top- and bottom-line results beat Wall Street’s expectations, investors were disappointed with its third-quarter guidance.

As a result, the housing stock was down by 1.6% at the end of the trading day.

So what 

Zillow reported non-GAAP (adjusted) earnings per share of $0.47, which was up from $0.44 in the year-ago quarter and ahead of analysts’ average estimate of $0.35 per share. 

Image source: Getty Images.

The company’s sales of $1 billion in the quarter also outpaced Wall Street’s consensus estimate of $985 million. 

But investors were disappointed that the company’s revenue was down 23% from the year-ago quarter and that management issued worse-than-expected revenue guidance for the third quarter. 

Zillow’s revenue outlook for the third quarter is in the range of $431 million to $461 million, which is far below Wall Street’s expectation of $563.9 million and down from $1.7 billion in the year-ago quarter. 

Now what 

Zillow co-founder and CEO Rich Barton said in a press release, “Despite the challenges of the macroeconomic environment, we’re making strides in key growth areas.” 

But investors appear to disagree. The company’s slowing revenue, along with a difficult housing market, have led investors to send Zillow’s stock down 66% over the past 12 months. 

And with the company’s latest quarterly results disappointing investors, it’s clear Zillow still has its work cut out for it.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zillow Group (A shares) and Zillow Group (C shares). The Motley Fool has a disclosure policy.

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