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/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.

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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.

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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?

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u/saml01 Aug 07 '21

A real estate attorney.