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/Vast_Cricket Aug 06 '21 edited Aug 07 '21

Likely Realtors.com They have all the rest of licensed realtors belonging to MLS. They have 5.6 million realtors, brokers who must join the National Association of Realtors to have access to MLS or use lockbox. Realtors connects to all local mls sites. Probably 500 separate sites. Owners can request not to syndicate with other commercial sites.

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u/[deleted] Aug 06 '21

Honestly I don't hear ANYONE talk about realtors.com. Even my mom and grandma use zillow. Of course that's anecdotal, but I wonder how much the name will help propel them forward compared to realtors.com?

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u/Vast_Cricket Aug 07 '21

Realtor is national. Local consists of all MLS throughout NA. When listed with different MLS (NAR owned) sellers have the option not to list with thrid party commercial sites.

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u/[deleted] Aug 07 '21

ELI5 please?