Zillow Group, Inc.NASDAQ
6 Reasons Zillow Is Still Extremely Overpriced
Jake Huneycutt • 33 Comments
Jake Huneycutt • 33 Comments
Mon, Dec. 5, 5:38 PM
Thu, Dec. 1, 1:00 PM
Thu, Dec. 1, 10:55 AM
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Wed, Nov. 2, 1:01 PM
Tue, Nov. 1, 5:00 PM
- Results – revenue $224.6M (+35.5% Y/Y, $3.8M above estimates), EPS $0.17 ($0.04 above estimates), GAAP net income $6.8M (+126% Y/Y), adjusted EBITDA $59.5M (+102% Y/Y)
- Segment revenues – Marketplace $206.9M (+45% Y/Y), Premier Agent $158.3M (+33% Y/Y), Other Real Estate $28.8M (+182% Y/Y), Mortgages $19.8M (+57% Y/Y), Display $17.7M (-25% Y/Y)
- Highlights – 164M average MAUs across products
- FY 2016 projections – Raises revenue to $837M-$842M (+30% Y/Y at midpoint) and adjusted EBITDA to $136M-$141M.
- CEO Spencer Rascoff: "With all of our marketplaces performing strongly, we expect to end 2016 in a strong position to continue executing on our strategic priorities."
- Zillow Class A (NASDAQ:ZG) -0.85%, Class C (NASDAQ:Z) -0.73% in extended trading after hitting initial respective 5%+ and 6%+ gains on the release.
- Prepared remarks
- Conference call
- Press release
Tue, Nov. 1, 4:34 PM
Fri, Oct. 7, 9:32 AM
- Price target of $40 set (current price Class A – $33.67, Class C – $34).
- Analyst Kerry Rice: "We expect real estate agents to spend more of their marketing budget on Zillow in the coming years given our belief that its portfolio of websites remains the go-to destination for consumers. While network effects and the scale of Zillow's marketplace create a virtuous cycle and competitive advantages, we believe the core revenue growth driver is agents' embracing Zillow to unlock significant returns on their marketing dollars. We believe Zillow’s core addressable market is significant and expanding opportunity with sizable adjacent markets, such as mortgages and rentals layering on additional growth opportunities. We expect margins to expand on solid revenue growth. We view Zillow’s competition as limited and its lead is extending."
- Class A Zillow (NASDAQ:ZG) shares up 1.5% at the open, Class C (NASDAQ:Z) higher by 2%.
Fri, Aug. 5, 11:10 AM
- Zillow, (Z, ZG) posted Q2 results yesterday with a 21% Y/Y increase in revenue and an all-time high of over 171M unique visitors, but eyes have shifted to continued net losses and steep legal expenses.
- The company reported GAAP net loss of $156.1M vs. a net loss of $38.7M for the same period last year. The majority of this quarter's figure is attributed to $142.5M in litigation settlement expenses.
- Adjusted EBITDA was -$101.3M vs. $21M in Q2 2015. This figure is similarly attributed to legal costs. Excluding the litigation impact, adjusted EBITDA would have been $28.7M.
- Investors, though, are not interested in what would have been as the company continues to trade lower following the report.
- Zillow Group-A (ZG) shares are up more than 30% on a 3-month basis and more than 40% on a 1-year basis. Group-C (Z) shares are up nearly 40% and more than 45% on a 3-month and 1-year basis, respectively.
Mon, Jun. 6, 5:36 PM
- Zillow (Z, ZG) has settled a lawsuit filed by News Corp.-owned (NWS, NWSA) Move Inc., the National Association of Realtors (NAR), and three related entities for $130M. The settlement doesn't contain any admission of wrongdoing. (8-K filing)
- Move had sued Zillow for trade secret theft over its hiring of two former Move execs - chief industry development officer Errol Samuelson and MLS partnerships VP Curt Beardsley - and had claimed $2B in damages. Zillow sold off last month after receiving a mixed ruling in the suit regarding allegations the hired execs destroyed evidence that could've helped Move's case.
- Z +8.5% after hours to $32.90. ZG +4% to $32.00. Legal costs related to the lawsuit have had a big impact on Zillow's bottom line.
Mon, Jun. 6, 5:35 PM
Fri, Jun. 3, 7:08 PM
- Zillow (Z +0.7%) has cleared at least some of its legal entanglements, settling four federal suits over harassment and discrimination and coming to settlement terms on a class-action suit regarding overtime pay at its Irvine, Calif., office.
- Zillow admits no wrongdoing in the suits, which range from sexual harassment to racial and age discrimination. The company admitted in court documents that sexually explicit texts sent to a female employee were inappropriate but that the harassment claim was frivolous.
- In the class action, at least 120 hourly sales consultants charged the company with pressuring workers into working early, late and through breaks without pay. That involves about $5M in overtime pay; a "settlement in principle" has been reached, but not yet ratified by the judge.
- Zillow is headed into a high-profile trial against Move Inc. set to begin Monday, regarding Move executives who jumped to Zillow in 2014 (and the effects of those moves on a failed Move-Trulia merger that led to Zillow's acquisition of Trulia).
Wed, May 18, 5:40 PM
- In a response to today's rulings in its trade-secrets case against Zillow, Move Inc. (NWS, NWSA) says it's pleased with the actions and is looking forward to presenting evidence to a jury June 6.
- That, despite the fact that the company would have preferred a more declaratory judgment to end the case in its favor.
- The judge allowed an instruction that allows the jury to infer that destroyed evidence could have helped Move's case, or hurt Zillow's. Curt Beardsley -- who left Move along with Errol Samuelson for Zillow -- had testified that he had erased files from Zillow computers to cover up viewing of pornography, in what Zillow chief Spencer Rascoff called a "knucklehead" move.
- "This important ruling validates our claim that one of Zillow's top executives, Curt Beardsley, acted with 'willfulness and bad faith' in destroying evidence, and his actions have 'prejudiced plaintiffs' ability to prosecute their case,' " Move says. It adds that the case has cost Zillow more than $40M, "making the two poached executives among the most expensive in corporate history."
- Meanwhile, Zillow (NASDAQ:Z), which declined as much 6.6% in the ruling's aftermath, recovered quickly to close up 2.8% on the day, and has added another 0.8% in gains after hours.
- Updated 7:25 p.m.: Zillow looks forward to the trial as well: "We applaud the Court’s decision with respect to Zillow and Errol Samuelson, which validates what we already knew: that during the pre-trial hearing, News Corp did not offer evidence that Zillow or Errol did anything wrong or that the we failed to live up to our obligations in this case. ... Ultimately this comes down to News Corp. trying to win in the courts, since they aren’t winning in the court of consumer opinion."
- Now read Dual Share Class Arbitrage Opportunity With News Corp. »
Wed, May 18, 3:04 PM
- The Washington state judge handling a Move lawsuit against Zillow (Z -3.1%) has denied a Move motion for sanctions against Zillow in response to allegations two former Move execs hired by Zillow destroyed evidence. But he also granted Move (owned by News Corp.) a jury instruction that will allow the jury to infer the missing evidence would have benefited Move's case or hurt Zillow's.
- Move has sued Zillow for trade secret theft, while claiming its rival owes $2B in damages related to the theft and the related destruction of documents. Errol Samuelson, one of the execs who left Move for Zillow, was previously Move's chief strategy officer and is now Zillow's chief industry development officer.
- Zillow forecast earlier this month legal costs related to its battle with Move/News Corp. will have a $50M-$55M impact on 2016 adjusted EBITDA.
Wed, May 4, 9:10 AM
Tue, May 3, 4:39 PM
- Zillow's (Z, ZG) core Marketplace revenue rose 23% Y/Y in Q1 on a merger-adjusted basis to $169M, an improvement from Q4's 14% growth. Helping out: Average revenue per Premier Agent advertiser (ARPA) rose 40% Y/Y to $487, as Zillow's strategy of focusing on higher-value Premier Agent clients pays off.
- Within the Marketplace segment, real estate revenue rose 34% to $152.5M, and mortgages revenue 65% to $16.5M. Display ad revenue, which is being de-emphasized, fell 34% to $17M. Zillow notes sales to Premier Agent clients who have been customers for over a year rose 56%, and that sales to those spending more than $5K/month rose 83% on a dollar basis.
- Monthly unique users rose 22% Y/Y in March to over 166M (a new high), and averaged over 156M in Q1. Zillow claims a record online real estate audience share of 63% for March (per comScore), with a 72% share on mobile.
- Though sales guidance has been hiked, full-year adjusted EBITDA guidance remains at $115M-$125M. Legal costs related to the News Corp. suit are expected to have a $50M-$55M impact. 2016 capex guidance is at $41M-$43M.
- Z +12.3% after hours to $28.13. ZG +13.3% to $29.15.
- Zillow's results/guidance, earnings release
Tue, May 3, 4:16 PM| Tue, May 3, 4:16 PM | 7 Comments