Why Zillow Shares Got Crushed

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 Zillow got crushed today by as much as 11% after the company announced earnings results

So what: Revenue in the first quarter hit a new record of $39 million. That top line beat expectations of $37.4 million, and earnings per share were better than expected. Zillow lost $0.11 per share, which was better than the $0.13 per share in red ink that investors were expecting. However, Goldman Sachs downgraded shares from "buy" to "neutral," which likely added pressure to the stock today.

Now what: The increased expenses this past quarter were related in part to acquisitions made at the end of 2012, which required increased investments in marketing and operating costs. Share-based compensation was also up. And on the bright side, Zillow boosted its full-year outlook and now expects revenue in the range of $178 million to $182 million.

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

Editor's note: Many analysts expected Zillow to lose $0.13 per share rather than the $0.03 per share mentioned in a previous version. The Fool regrets the error.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

The article Why Zillow Shares Got Crushed originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, 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.