Seeking Alpha
Venture capitalist, tech
Profile| Send Message|
( followers)  

Many expect the current year to be the breakthrough year for the housing market. While the housing sector was seeing pockets of recovery in 2013, 2014 is expected to be a lot better – mostly because according to analysts, it has “Nowhere to Go (but Up)”. The National Association of Home Builders is projecting a 24% growth in total housing starts, with even larger gains for single-family units. The online housing services sector is expanding their market offerings to cater to this growing demand.

Zillow’s Financials
Zillow’s (Nasdaq: Z) Q4 revenues grew 70% over the year to $58.3 million, ahead of the Street’s estimates of $56.0 million. EPS of $0.06 also beat the market’s projected EPS of $0.02.

By segment, real marketplace revenues grew 71% to $40.5 million and mortgage marketplace revenues grew 69% to $5.3 million. Display advertising revenues are also growing strong and reported a 67% growth over the year to $12.5 million.

For the year, Zillow’s revenues grew 69% over the year to $197.5 million, while increased spending on marketing and R&D drove earnings down to $0.17 per share from $0.38 per share a year ago.

Among other metrics, it added over 3,565 premier agent subscribers to end the year with 48,314 agents. Mortgage marketplace is also seeing increasing traction, and it attracted more than 4.4 million loan requests last quarter. Average monthly unique users grew 57% over the year to 54.4 million, and the company saw traffic surge to 70 million unique users by January this year.

For the current quarter, Zillow projected revenues of $62 million-$63 million, marginally ahead of the market’s projections of $61 million. Zillow estimates the adjusted EBITDA for the quarter to come in at $4.0 million- $4.5 million. It expects to end the current year with revenues of $288.0 million-$294.0 million with an EBITDA of $38.0 million-$40.0 million.

Zillow’s Product Expansion
Recently, Zillow released a newly-designed a Pre-Approval product that empowers consumers by showing them how much they can afford. The tool also helps agents and sellers get confidence in the credibility of the buyers. The pre-approval procedure takes a few minutes on the Zillow site and has received positive reviews so far. Zillow claims to be the pioneer in providing this tool where consumers can find a lender, who has been rated and reviewed by other borrowers, to issue a pre-approval letter in such a short time.

Earlier this year, it also relaunched StreetEasy, a New York City focused real-estate site it had acquired last year. As part of the launch, Zillow has not only redone the site’s look and feel, but also changed its model from a freemium one to a completely free service. Zillow believes that it has an improved chance of monetizing the traffic that comes on StreetEasy instead of counting on subscriptions for revenues.

Zillow’s stock is trading at $88.26 with a market capitalization of $3.5 billion. It touched a 52-week high of $103.00 in September last year.

Move’s Financials
Move’s (Nasdaq: MOVE) Q4 revenues grew 7% over the year to $56.5 million ,with consumer advertising revenues growing 6% to $43.5 million and software and services revenues growing 12% to $12.9 million. EPS for the quarter fell from $0.13 a year ago to $0.11.

During the quarter, unique users grew 13% over the year to 23.9 million. Move’s ListHub also expanded its reach to Houston Association of Realtors, and the service is now available to an additional 26,000 members.

It ended the year with revenues of $227 million and an EPS of $0.01. A year ago, it had reported revenues of $199 million with an EPS of $0.12.

For the current quarter, Move projected revenues of $58 million with an adjusted EBITDA of $5 million. It expects to end the year with revenues of $254 million-$258 million and an adjusted EBITDA of $30 million.

Move’s Product Growth
During the quarter, Move also focused on enhancing its offerings. It expanded its business relationship with Bankrate into a multi-year extension to enable the availability of mortgage content across Move sites. It also improved its technology offerings that helped grow the site’s efficiency. As part of the offerings for its agents, Move provided Realtors with webinars that are aimed at helping them optimize and grow their businesses.

Move’s stock is trading at $11.88 with a market capitalization of $466.78 million. It touched a year high of $18.36 in October last year.

Trulia’s Financials
Finally Trulia’s (NYSE: TRLA) Q4 revenues grew 141% over the year to $49.73 million, compared with the Street’s projections of $49.4 million. EPS of $0.03 was short of the market’s projected EPS of $0.07.

By segment, Marketplace revenues grew 190% to $42.2 million and Media revenues grew 26% to $7.6 million. It ended the year with 35.3 million monthly unique visitors and 60,000 subscribers.

It ended the year with revenues growing 111% to $143.7 million, and EPS grew to $0.31 compared with a loss of $0.67 per share a year ago.

For the current quarter, Trulia projected revenues of $53.1 million-$53.5 million, compared with the Street’s estimate of $53.1 million. Trulia expects to end the year with revenues of $245 million-$248 million, ahead of the market’s estimate of $245 million.

Trulia’s Marketing Focus
Trulia is spending big money on marketing in the coming quarters to help attract more mobile users. It recently announced a $45 million ad campaign on TV, radio, web, and print targeted at mobile users. Compare that with the $71 million it spent in the entire year in 2013. The move is especially focused on competing with Zillow, which currently has a bigger following than Trulia.

Trulia’s stock is trading at $33.03 with a market capitalization of $1.22 billion. It touched a 52-week high of $52.71 in September last year.

Source: Online Real Estate Sector Preparing For The Housing Market Turnaround