Why Did Zillow's CFO Just Resign?
Zillow Group Inc (NASDAQ: Z) on Thursday announced its Chief Financial Officer Chad Cohen will resign from the company effective August 7. Cohen has been with the company since 2006 and was named CFO in 2011.
In a report published Friday, SunTrust Robinson Humphrey analyst Bob Peck suggested that the resignation is a "minor setback" for Zillow as the resignation comes at a time when the company is still integrating Trulia Inc. The analyst did however note that the executive was unlikely to have been fired, nor should his resignation suggest there are any accounting issues.
Second Quarter Trends
Peck noted that since the Trulia deal only closed in mid-February, many of the larger scale post-merger integration (PMI) changes did not take full effect until the second quarter (or are still ongoing). As such, the analyst suggested that the company's second and third quarter results will see the largest impact from changes.
Peck said that he remains "comfortable" with his $140 million revenue and $4.1 million EBITDA estimates for the second quarter and his $685 million in revenue and $83 million in EBITDA estimates for the full fiscal year.
Peck also estimated that for the second quarter, agent revenues will show a 7 percent growth from the previous quarter with agent count down 3 percent as Trulia agents continue to decline post-acquisition while Zillow agents continue to expand but at a "more measured pace."
Finally, Peck stated that Cohen is likely to find several attractive CFO or CEO opportunities in the technology and internet sector. For Zillow, executing on the PMI and business continuity will be "paramount" throughout the remainder of 2015.
Shares remain Buy rated with an unchanged $130 price target.
Latest Ratings for Z
|Jul 2016||Morgan Stanley||Maintains||Overweight|
|May 2016||Cowen & Co.||Upgrades||Underperform||Market Perform|
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