Why Zillow Shares Zoomed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of real estate website operator Zillow popped 12% today after its quarterly results and guidance topped Wall Street expectations.

So what: Zillow's fourth-quarter results -- EPS of $0.02 on a 72% surge in revenue -- and current-quarter guidance were so impressive that analysts have no choice but to raise their price targets yet again. In fact, the number of unique users on its site spiked 47% year over year to 34.5 million in the quarter, confirming bullish speculation that the rebounding housing market is helping boost traffic.

Now what: Management now sees first-quarter revenue of $36 million-$37 million, ahead of Wall Street's estimate of $34 million. "We're looking forward to 2013 as we focus on three core priorities: attracting more users with great products and services; growing our Premier Agent business with unmatched value and tools; and accelerating our emerging mortgage, rental and home improvement marketplaces," said CEO Spencer Rascoff in a statement. Of course, with the stock now up a whopping 85% over the past three months alone and trading at a price-to-sales ratio of 13, there isn't much room for error.

Interested in more info on Zillow? Add it to your watchlist.

A fresh idea for 2013
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

The article Why Zillow Shares Zoomed originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Zillow. The Motley Fool owns shares of Zillow. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.