On Oct 9, 2015, shares of Zillow Inc. ZG hit a 52-week high of $35.15. The stock eventually closed at $34.89, representing a one-year return of 11.6% and a year-to-date return of 5.7%. The average trading volume for the last three months aggregated approximately 3,335K shares. The overall long-term expected earnings growth rate for this stock is 30%.
On Aug 4, 2015, Zillow reported its second-quarter fiscal 2015 results. It posted an adjusted loss per share (excluding all one-time items but including stock based compensation expenses) of 52 cents, narrower than the Zacks Consensus Estimate of a loss of 64 cents.
During the second quarter, Zillow’s top line grew 20% to $171.3 million on a year-over-year basis. It surpassed the Zacks Consensus Estimate of $169 million. The significant year-over-year increase was primarily due to the Trulia acquisition. Also, a 29% surge in Marketplace revenues and a 15% jump in Display revenues drove the quarter’s results.
Within Zillow’s Marketplace segment, Real Estate marketplace (comprising Premier Agent, Diverse Solutions, Rentals and StreetEasy product lines) revenues soared 37% year over year driven by strong agent additions.
Zillow has been continuously working toward improving its revenue structure by increasing its clientele. In order to achieve this goal, the company is pursuing strategic acquisitions and is offering new and better products to its customers.
In Feb 2015, Zillow announced the completion of the Trulia deal. The acquisition is a strategic fit as both the companies extend mobile and web solutions providing important information about homes to users.
During the quarter, nearly 141 million average monthly unique users visited Zillow via mobile devices. Zillow Group brands now represent approximately 72% market share of all mobile exclusive visitors to the category, according to comScore.
During its second-quarter earnings release, Zillow provided its fiscal 2015 guidance. For fiscal 2015, revenues are expected to be roughly $690 million. The Zacks Consensus Estimate is pegged at $665 million.
We believe that strong traffic growth, frequent product launches and the growing Agent business are positives, going forward. In particular, product launches like Zillow Real Estate and Zillow Digs App for Apple Inc.'s AAPL iPhone and iPad are positives.
Moreover, the Trulia acquisition will not only make Zillow the number one online real estate information provider in the U.S., but also help it to compete against Move Inc., which has now been acquired by News Corp. NWSA.
Apart from acquisitions, Zillow entered into several partnerships with real estate listing companies and real estate brokers to enhance its product portfolio. However, the company is currently in the high investment phase and therefore profitability might be an issue in the near term.
Zillow currently sports a Zacks Rank #1 (Strong Buy). Another stock worth considering is NetApp, Inc. NTAP, carrying the same Zacks Rank as Zillow.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment