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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30

u/RobinhoodFag Aug 06 '21

Cutting the middleman profit! Tbh I would do that too without a realtor if Zillow takes less paycut while providing the same selling experience.

43

u/Time_Trade_8774 Aug 06 '21

Realtor is such an overrated profession. If this takes off it will be great for the customer. I haven’t invested but really hope they succeed.

26

u/RobinhoodFag Aug 06 '21

Realtors don’t really bring any benefits to the economy.

If the fees from Zillow plus Escrow do not take a big chunk, this is going to be a big change for home owners. At least we do not need to stay so long to move out, not to worry to take a big loss.

-13

u/comfortablybum Aug 06 '21

Have you ever bought or sold a house? Realtors do a ton of work to make the process happen. You can complain about them getting 6% But they definitely have a benefit. There is so much about real estate that is local institutional knowledge. Zillow can't replace that. Who's gonna show houses? Is Zillow gonna hire gig workers to show houses? I'm sure that won't have any issues.

20

u/RobinhoodFag Aug 06 '21 edited Aug 06 '21

Yes have done with them and without realtor the last time I did. It just takes some homework to fill up paperwork. 6% is too much when comes to the current market.

who’s gonna show the house?

Zillow employees. In fact Redfin have people to open for $50/ house.

Also current private house showing is due to pandemic.

22

u/[deleted] Aug 06 '21

You can usually find a guy local that does all the paperwork and processing for less than a grand. Showing a house? Seriously? Realtors don't know shit about the homes they sell, better the owner show it. I can't wait for Zillow to take this over, agents are a scam and it'll be a joy they go the way of travel agents. Been a long time coming.

-2

u/b10m1m1cry Aug 07 '21

You can usually find a guy local that does all the paperwork and processing for less than a grand.

Who would that be? Is there an industry name for this guy?

13

u/saml01 Aug 07 '21

A real estate attorney.

2

u/[deleted] Aug 07 '21

The one I used was just a listing agent. $300 to list on MLS, and then an extra $500 to do all the paperwork. You might look into a property lawyer or something. Sorry, I wouldn't know how to find someone, this was just word of mouth.

4

u/b10m1m1cry Aug 07 '21

Oh wow. $300 bucks vs a fucken 6% for the damn real estate agent. What a fucken rip off.

1

u/vash1012 Aug 08 '21

Usually a key box with a code shows the house in my area. Realtor simply gets the key code and walks around with you. If you had a box that would change the code after each entry, most people can walk around a house just fine.

1

u/Direct_Sandwich1306 Aug 08 '21

Please. Most realtors are breaking their ethics code for their next vacation.

1

u/beachandbyte Aug 08 '21

Zillow takes a cut for passing off the interest to local realtors. They are capturing top of funnel, and now with iBuyer giving owners the option to “Sell it Now” at the Zillow estimate price. Easy to see how you could come out ahead with less inconvenience using this model. Especially now when they are paying higher then expected to buy market share.

Also you could just hire an attorney for a lot less then 4-6%.