Analysts had expected that Zillow earnings would weather the housing market's storm. Instead, the company posted a loss and issued weaker-than-expected guidance that sent the stock falling in after-hours trading.

Zillow reported a per-share 70 cent loss on $724 million in revenue in its third quarter -- a big divergence from the 16 cents a share earnings on roughly $754 million that investors had anticipated.

Zillow's fourth-quarter guidance also came in below expectations: It foresees revenue in a range of $635 million to $665 million, below the $709.5 million analysts foresee, according to FactSet.

The results don't look that bad when you consider the rest of the housing market, says Zillow. "We grew revenue and outperformed the real estate category during one of the toughest housing markets in a generation," said Jeremy Wacksman, Zillow's CEO, said in a statement.

In a letter to shareholders that cited data from the National Association of Realtors, the company noted that its revenue grew 7% from the year prior in the third quarter, compared to a housing market that it says grew 1% in the same time period.

Shareholders didn't necessarily find comfort in the comparison. Zillow stock plunged 15% in after-hours trading shortly after the company reported its results.

"Even as housing conditions deteriorated sharply, Zillow kept growing and outperforming, powered by our brand, audience, value to partners, disciplined cost management, and strong growth levers across our well-diversified business," Wacksman and CFO Jeremy Hofmann wrote in the letter. "These advantages are driving our performance through an exceptionally difficult macro environment today and position us to accelerate when conditions improve."

The results come as Zillow transitions its core agent offering to a new model called "Zillow preferred," through which agents pay the company only after a home sale closes, not upfront, to connect with buyers.

Browsing Zillow's website is free. The company makes money, in part, by charging the real estate agents who use it to connect with buyers. This revenue goes into its residential segment, which represented the bulk of its revenue -- $419 million, or about 58% of total revenue -- in its third quarter.

Zillow has said the new model generates more revenue per connection with a buyer than the old one, but the shift also contributed to the company's lower-than-expected third-quarter guidance.

Since the company logs revenue at the end of a home purchase instead of at the beginning, it takes longer for the model to pay off. The company said it expects its residential revenue to decline in a range of 9% to 15% from the year prior in the fourth quarter.

Beyond its core residential services, Zillow has been expanding into other businesses, such as mortgages and rental. Mortgage revenue, at $70 million, missed consensus expectations, which called for $80.9 million, while its rental revenue was $220 million, lower than the $222.8 million expected.

It's no secret that high home prices and higher mortgage rates are headwinds for housing companies everywhere -- including Zillow. The stock is down roughly 55% this year on both the threat of technological disruption and slow home sales, putting it on track for its worst full year on record, based on available data back to July 31, 2015, according to Dow Jones Market Data.

"We believe a tougher housing backdrop, softer traffic and survey trends, and near-term headwinds from the accelerated Preferred transition warrant a more conservative outlook," a team of KeyBanc analysts, led by Sergio Segura, wrote in a Tuesday note.

The KeyBanc team also maintained its Overweight rating, but lowered its target price to $42 from $48.

"However, we view valuation as attractive, while Rentals and Mortgages continue to deliver robust growth despite a challenging market," they wrote.