Hayden Cole
Long/short equity, deep value, special situations

Zillow - Slowing Growth And Escalating Costs Are Cause For Concern

On the face of it, 2013 was a great year for online real estate company, Zillow (NASDAQ:Z). It saw stratospheric growth in users, Premier Agent subscribers and revenue and managed to broaden its lead over competitors Trulia (TRLA) and Move (NASDAQ:MOVE).

However, looking beneath the surface, escalating costs and a more aggressive marketing strategy from Trulia point to Zillow continuing to be a compelling short in 2014.

2013 in review

Zillow ended 2013 with impressive revenue growth and gains in both unique users and Premier Agent subscribers. Revenue grew 69.1% year-over-year to $197.5 million. It reported a record 70 million unique users in January, an increase of 24 million year-over-year. Premier Agent growth was 64%, and...

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