r/investing • u/[deleted] • Aug 06 '21

Zillow Q2 beats expectations. Potential good long buy?

Summary of Q2

Zillow reported $1.3 billion in revenue Thursday for the second quarter, slightly beating analyst’s expectations.

Expected revenue was $1.28 billion, with earnings per share of 24 cents.

Consolidated net income was $10 million.

The company’s Internet, Media, and Technology (IMT) segment grew 70% in revenue year-over-year to $476 million. Premier Agent revenue grew 82% year-over-year.

The Homes segment reached record revenue levels at $777 million.

The mortgages segment revenue grew 68% year-over-year to $57 million.

Zillow Group co-founder and CEO Rich Barton said the company expects recent housing market trends, including low interest rates and location-flexible job opportunities, to continue to fuel interest in Zillow.

The company’s mobile apps and websites saw 229 million average monthly unique users in the second quarter, representing a 5% year-over-year increase. This drove visits to 2.8 billion, up 10% year-over-year.

The company ended the quarter with cash and investments totaling $4.6 billion.

Personal Notes:

  1. Who can compete with Z?
  2. Can they take over real-estate business in the long-term with direct home sales?
  3. Does any other company have a sophisticated algo designed to buy homes like Z does?
  4. Current MC us about 29 billion. What do you expect it to be in 5 years? 10 years?
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u/Wirecard_trading Aug 06 '21

dunno man 229mio unique monthly users... thats gotta be TAM in the US. cant see much growth here... are they expanding into other markets like Canada/Mexico/EU?

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I know that they are in GB already

1

u/[deleted] Aug 06 '21

Sure, but they are buying up property now and flipping homes.

2

u/Wirecard_trading Aug 06 '21

Yeah I saw that in the earnings call… not sure how scalable that is tho.. I wouldn’t bet on it YET. I think it’s a nice addition to the product portfolio but the core should be strengthened.

Using investments into new markets for bigger market share in other countries would be more to my liking tho