Shares of Zillow Group Inc. took a dive Monday, after KeyBanc analyst Edward Yruma highlighted how most of the homes the real estate services company purchased, with an aim to flip them, were now worth less than what they paid for them.
shed 5.8% in midday trading. Although the stock was still up 13.6% since closing at a 13-month low of $86.00 on Oct. 18, which was the day Zillow said it would stop buying U.S. homes after building a big backlog, the stock was still down 51.1% since closing at a record $199.90 on Feb. 16.
“Zillow may have leaned into home acquisition at the wrong time, and we believe earnings may be at risk due to its current home inventory ($1.17 billion at 2Q21),” Yruma wrote in a note to clients.
Yruma said it completed an analysis of 650 homes in…