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Zillow Group, Inc. (Z)

- NASDAQ
  • Mon, Aug. 24, 9:19 AM
    | 13 Comments
  • Wed, Aug. 5, 9:19 AM
    | 11 Comments
  • Tue, Aug. 4, 5:38 PM
    | 9 Comments
  • Tue, Aug. 4, 5:34 PM
    • Low expectations have helped Zillow (NASDAQ:Z) jump to $79.80 following its Q2 beat. Shares were down 30% YTD going into earnings.
    • On its earnings call, the company has reiterated 2015 revenue guidance of $690M (above a $666.5M consensus). Adjusted EBITDA guidance has been hiked by $5M to $85M-$90M. Q3 revenue guidance is nonetheless at $175M-$177M, below a $180.9M consensus.
    • Pro forma revenue growth (accounts for the Trulia merger) was 20% in Q2, a slowdown from Q1's 35%. Marketplace revenue rose 29% to $145.5M, while display revenue (hurt by a weak display ad market, ask LinkedIn and Yelp) fell 15% to $25.8M.
    • With Marketplace, real estate revenue rose 37% to $122.6M, mortgage revenue rose 44% to $10.4M, and Market Leader (real estate CRM software) fell 21% to $12.5M. Zillow reiterates it's "conducting a strategic review" for Market Leader.
    • Advertisers/ARPA: The company had 101,297 agent advertisers at the end of Q2, down 2,118 Q/Q. On the other hand, average monthly revenue per advertiser (ARPA) rose to $375 from $354 in Q1 and $318 a year ago. Zillow notes it "strategically ended several of Trulia's short-term discounted products and changed the sales team's incentives to focus on net revenue rather than the number of advertisers." The company adds it's focusing on "high ARPA agents who provide a superior consumer experience."
    • GAAP sales/marketing spend equaled 51.3% of revenue, R&D 30%, and G&A 26%. Gross margin was 90%. Average monthly unique users totaled 141M. Zillow claims a 72% share of U.S. mobile exclusive real estate visitors (per comScore).
    • Q2 results, PR
    • Update (7:25PM ET): Zillow is now up 14.5% AH.
    | 7 Comments
  • Tue, Aug. 4, 4:32 PM
    • Zillow (NASDAQ:Z): Q2 EPS of -$0.01 beats by $0.25.
    • Revenue of $171.27M (+117.7% Y/Y) beats by $2.58M.
    • Shares +2.5%.
    • Press Release
    | 21 Comments
  • Mon, Aug. 3, 4:47 PM
    • Kathleen Philips, Zillow's (NASDAQ:Z) COO since 2013, is the company's new CFO. Amy Bohutinsky, Zillow's chief marketing officer for the last 4 years, is the new COO. Both will continue reporting to CEO Spencer Rascoff.
    • Zillow announced on July 9 CFO Chad Cohen is leaving to "pursue other business interests." Q2 results arrive tomorrow afternoon.
    | 9 Comments
  • Fri, Jul. 31, 9:29 AM
    • Cowen has downgraded Zillow (NASDAQ:Z) to Underperform ahead of Tuesday afternoon's Q2 report. Like others, the firm is worried about slowing subscriber and traffic growth. It also cites concerns about valuation and meeting 2016 expectations.
    • Shares have fallen to $81.00 premarket, and are now down 24% YTD. Barclays downgraded to Underweight on July 20, while Morgan Stanley launched at Overweight on July 14.
    | Comment!
  • Fri, Jul. 24, 1:59 PM
    • Nearly 3 years after originally taking aim at Zillow (NASDAQ:Z), Citron Research has published a list (.pdf) of "Top 10 reasons why Zillow is going to trade below $40 next year."
    • Among Citron's arguments: The pending departure of CFO Chad Cohen; $13.7M worth of stock sales by CEO Spencer Rascoff over the last 12 months; Web scraping data that suggests Zillow/Trulia are collectively losing real estate agents; and a belief the company "can never be acquired at its current share price."
    • Of note: While Zillow has fallen considerably from a July 2014 high of $164.90 (hit amid Trulia merger euphoria), shares are still well above where they closed ($44.41) the day before Citron's original report. Q2 results arrive on Aug. 4.
    | 28 Comments
  • Mon, Jul. 20, 9:28 AM
    • Believing online local services competition is growing, Barclays' Chris Merwin has downgraded YELP to Equal Weight, and Zillow (NASDAQ:Z) to Underweight. His targets have respectively been cut to $36 and $70 and from $50 and $90.
    • Merwin: "VC-funded startups are able to undercut larger players on price or outspend on marketing, without the scrutiny of public investors ... Heading into earnings, we favor lower multiple names that we believe are at the beginning (or in the midst) of a positive earnings revision cycle, rather than challenged stocks with ostensibly 'cheap' multiples relative to consensus growth estimates that are probably too high," Both Yelp and Zillow have fended off a number of well-financed rivals over their histories.
    • He notes Yelp and Zillow have each seen traffic growth slow considerably, with Yelp's Q1 monthly unique visitors only up 8% Y/Y. Merwin argues each company needs to up its marketing spend to boost traffic, and believes the spending needed by Zillow isn't factored into consensus estimates.
    • Merwin also issued a downbeat note on Zillow on July 10, following news CFO Chad Cohen is resigning. Morgan Stanley launched at Overweight a few days later.
    • YELP -3.4% premarket to $33.79. Z -2.4% to $81.27. Yelp's Q2 report is due on July 28. Zillow is expected to report prior to Cohen's resignation date (Aug. 7).
    | 1 Comment
  • Tue, Jul. 14, 10:14 AM
    • Believing the company is expanding its addressable market by "shifting broker economics to advertising," Morgan Stanley's Dean Prissman has launched coverage on Zillow (NASDAQ:Z) with an Overweight rating and $108 target.
    • Prissman: "Low volume agents can’t afford to participate on Zillow. But since Zillow is gaining share of transactions, this is enabling more successful agents to take share from less successful agents. Since more successful agents have higher commission retention rates and invest more in advertising, Zillow is driving industry economics to advertising."
    • He adds the bottom 75% of agents account for only 40% of transactions and 16% of ad budgets. The launch comes 4 days after shares fell sharply on news CFO Chad Cohen is resigning.
    | 3 Comments
  • Fri, Jul. 10, 5:50 PM
    • "[W]e believe the timing of the CFO change is less than ideal, as Zillow (NASDAQ:Z) continues to navigate through its merger with Trulia, which we believe has so far led to disruption in both agent and traffic growth," writes Barclays' Chris Merwin (Equal Weight, $90 target) following news of CFO Chad Cohen's pending departure.
    • Merwin adds Trulia's agent sub growth has been hurt by salesforce departures and slowing traffic growth, and that management's decision to de-emphasize the Market Leader real estate CRM software platform (previous) is "another source of disruption to revenue."
    • He predicts integration pains will continue to weigh on Zillow's results in 2H15. Though Zillow didn't affirm/update Q2 guidance, Merwin's Q2 outlook is unchanged. However, he only forecasts Q3 and Q4 Y/Y sales growth of 15% and 14% - a sharp slowdown from Q4 2014's 47% - and thinks the company may once more need to up marketing spend.
    • SunTrust's Bob Peck (Buy, $130 target) is more positive, calling Cohen's departure a "minor disruption" and deeming it unlikely that he was fired or left due to accounting issues. He's still "comfortable" with a full-year sales estimate of $685M (above a $664.5M consensus).
    • Shares fell to new 52-week lows today. They now trade for 4.8x 2016E sales, after backing out cash/investments.
    | 13 Comments
  • Thu, Jul. 9, 5:40 PM
    • Top gainers, as of 5.25 p.m.: GCI +4.5%. SBS +2.2%. CHMT +2.2%. UDF +2.2%. SOHU +1.9%.
    • Top losers, as of 5.25 p.m.: Z -5%. HALO -4.7%. HELE -4.6%. DOV -3.9%. AQXP -2.4%.
    | 1 Comment
  • Thu, Jul. 9, 4:42 PM
    • Chad Cohen, Zillow's (NASDAQ:Z) CFO since 2011, is resigning to "pursue other business interests," effective Aug. 7. The company has begun a search for a new CFO.
    • Shares have fallen to $82.00 AH. The fact Zillow didn't use its announcement to reaffirm guidance (as if often done when a C-suite change is announced ahead of earnings) could be weighing.
    | 9 Comments
  • Fri, Jun. 19, 12:32 PM
    • Like Twitter, Zillow (NASDAQ:Z) is getting a lift from vague market chatter that it's a buyout target. 1.45M shares have been traded thus far vs. a 3-month daily average of 1.78M.
    • Friday short-covering could be helping out: 16.8M shares (32% of the float) were shorted as of May 29.
    • Oppenheimer's Jason Helfstein (Perform rating) issued a cautious note on Tuesday, arguing slowing traffic growth could put 2016 Street estimates at risk. "Per comScore, [U.S.] 2Q minutes are trending +3% y/y vs. +5% in 1Q and +30% in 4Q. To combat lower traffic, [management] will likely need to increase advertising, or test new products, at the expense of margin."
    | 1 Comment
  • Tue, May 12, 5:44 PM
    • After coming off a halt, Zillow (NASDAQ:Z) is up 1.8% AH in the wake of its Q1 report. In spite of a Q1 revenue miss, the company is reiterating full-year revenue and adjusted EBITDA guidance of $690M and $80M-$85M (provided on April 14).
    • The Market Leader real estate CRM software unit (acquired by Trulia in 2013) was a weak spot in Q1: Its sales fell 11% Y/Y to $13.6M. Display ad sales were also light, rising only 5% on a pro forma basis (i.e. counting both Zillow and Trulia's full numbers) to $25.6M. Yelp, LinkedIn, and others have reported soft Q1 display ad sales, while often blaming industry adoption of programmatic (automated) ad-buying platforms that have depressed prices.
    • Core real estate services revenue was stronger, rising 54% to $113.4M. Mortgage services revenue rose 33% to $10M.
    • Business metrics: Zillow had 103,415 Premier Agent advertisers at the end of Q1 - that figure includes Trulia agents. Premier Agent ARPA was $354; it was $359 for Zillow proper in Q4. Following the end of the ListHub deal, Zillow says it now receives 100% of real estate listings directly. March unique visitors totaled nearly 140M, and close to 2/3 of Zillow brand usage now occurs on mobile.
    • Pro forma adjusted EBITDA more than doubled Y/Y to $24.5M. $12.5M worth of acquisition costs were recorded, as were $25.1M worth of restructuring costs - Zillow/Trulia announced job cuts after their merger closed in February.
    • Q1 results, PR
    | 4 Comments
  • Mon, May 11, 10:35 AM
    • SunTrust's Bob Peck has upgraded Zillow (NASDAQ:Z) to Buy ahead of tomorrow's Q1 report, and hiked his target by $20 to $130.
    • Among the positives cited by Peck: A large and growing online real estate market; rising mobile usage; Zillow's network effect; strong ROIs for real estate agents; margin leverage (Peck thinks 45%+ op. margins are possible); and the optionality provided by adjacent opportunities.
    • He also dismisses concerns about Zillow's dependence on 3rd-party listings data, competition from News Corp./Realtor.com, and the size of Zillow's addressable agent pool. "At ~55% penetration of the top 350K agents (or ~200K) Zillow could generate ~$4B in agent revenues."
    • Zillow rallied last month after providing below-consensus 2015 guidance amid low expectations. Two weeks ago, Peck downgraded Twitter just before the company posted a Q1 sales miss and cut its full-year guidance (and crashed in response).
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Company Description
Zillow Group Incoperates the real estate and home-related information marketplaces on mobile and the Web, with a complementary portfolio of brands and products to help people find vital information about homes and connect with local professionals.