Zillow Founders Meeting

Image representing Zillow as depicted in Crunc...

Image via CrunchBase

Z

NASDAQ :

US$45.59)
Zillow CEO Spencer Rascoff, founders Lloyd Frink and Rich Barton, and VP of Rentals (& former CEO of Rentjuice) David Vivero. :
Analyst  believe rentals could contribute lightly to revenue in 2013 with a greater impact in 2014.

Graham continues to believe Zillow is attacking a large, nascent market with alacrity. Zillow hopes to bring ~1 million rental listings onto the platform by year-end, which would be ~1,000 additions per day for the rest of the year. Once this milestone is reached, management believes it can pursue monetization through several mechanisms.

Graham believes there is a “micro-TAM” of rental property manager marketing spend available for an online platform like Zillow’s that is greater than $500 million annually. In other updates, Graham believes Zillow’s broker relationships remain strong, an expanding real estate market is good for business, and the recently announced Google Now partnership could contribute meaningfully to visitor growth. Zillow operates a leading
network of real-estate sites with a clear mission to provide vital services to most of the real estate supply chain, including homeowners, buyers, sellers, renters, real estate agents, mortgage professionals, landlords, and property managers.

Zillow – Strong Growth / Evolution Target $45

Image representing Zillow as depicted in Crunc...

Image via CrunchBase

Zillow | Michael Graham
Z : NASDAQ : US$41.76 | Buy , Target US$45.00 

August 10
• Strong Q2 results; guidance likely conservative; maintaining BUY recommendation, raising target to $45 (from $42)
Summary
Zillow reported another strong quarter highlighted by outsized growth in PA subs, a mostly optical sequential decline in ARPU, and further evolution from marketing channel to solutions platform for real estate professionals.
Key Points
• “Third slot” monetization and Premier Silver Agents (who signed up for the free website feature) brought in ~4k new PA subs, mostly late in the quarter, compared with our estimate of ~1.8k. Generally, we now model more subs at a lower ARPU, but our revenue estimates go up.
Leverage remains robust, with nearly all incremental revenue falling to the bottom line. Expenses stay high this year but we see potential for
considerable leverage next year.
• As it buys and builds technology and incorporates it into a growing platform, Zillow is rapidly adding new services (Web sites, Z-Pro) and verticals (Mortgages, Rentals) that are raising the competitive stakes in this fast growing sector.
• We raise our EPS estimates for 2012, 2013, and 2014 $0.35, $0.78, and $1.42.
Valuation
Our new price target of $45 (up from $42) reflects 40x our new 2014 EPS  estimate of $1.42 (up from $1.32), discounted to present at a rate of 12.1%.

 

When Will The Case-Shiller House Price Index Turn Positive Year-Over-Year?

English: Zillow logo

English: Zillow logo (Photo credit: Wikipedia)

The CoreLogic index turned positive year-over-year in March: CoreLogic® Home Price Index Shows Year-Over-Year Increase of Just Over One Percent

Home pricesnationwide, including distressed sales, increased on a year-over-year basis by 1.1 percent in April 2012 compared to April 2011. This was the second consecutive year-over-year increase this year … 

And the FHFA index turned positive year-over-year in February: FHFA House Price Index Up 0.3 Percent in February

For the 12 months ending in February, U.S. prices rose 0.4 percent, the first 12-month increase since the July 2006 – July 2007 interval. 

However we are still waiting on Case-Shiller.

On Friday I posted Zillow’s forecasts for the May Case-Shiller indexes to be released this coming Tuesday. The year-over-year (YoY) decline in Case-Shiller prices has been getting smaller all year, and the Zillow forecast suggests the YoY decline will be even smaller in the May report – and be the smallest YoY decline since the expiration of the housing tax credit.

I looked at the recent improvement in prices (comparing the month-to-month changes for the NSA index to last year). If the Zillow forecast is close, at the current pace of improvement, it looks like the YoY change will turn positive in the July report – it could even happen in the June report (to be released next month).

Case-Shiller House Prices Indices

Here is a graph of the YoY change in the Case-Shiller Composite 10 and 20 indexes. In April, the indexes were down 2.2% and 1.9%, respectively.

Zillow is forecasting the Composite 10 index will be down 1.3% YoY in the May report, and the Composite 20 index will be down 1.0%.

Earlier this year, when I argued prices were near the bottom for the Not Seasonally Adjusted (NSA) repeat salesindexes, I thought the year-over-year change would turn positive late this year or early in 2013. Right now it looks like the July report.

 

 by Bill McBride

Read more at http://www.calculatedriskblog.com/2012/07/when-will-case-shiller-house-price.html#GFhLRVZePeubsOzi.99

Zillow – Not Snozzing – Cruising Into Profits

Image representing Zillow as depicted in Crunc...

Image via CrunchBase

Zillow (Z) : NASDAQ : US$30.60 |Buy , Target US$45.00

Thesis: Steady progress, potential for new revenue streams; maintaining 


Summary
Progress at Zillow has been steady
since the company reported strong Q4 results on Feb 15.

Over the course of 2012 important new revenue streams may become evident, driving continued operating momentum.
Hiighlights
• Unique User growth remained strong in February.

Forecast :UU growth to slow from 85% in 2011 to 68% in 2012, but note that rapid growth of mobile app usage could provide upside.
Zillow Mortgage Marketplace will see increasing emphasis and visibility, and could emerge as an important revenue driver as soon as this year.
• The next potential driver of revenue growth could come from the rental
market, an opportunity which Zillow is just beginning to develop.
• We continue to expect operating leverage to progress smoothly on an annual basis, with some potential for bumps quarter to quarter. Overall, we believe Zillow offers one of the best margin expansion profiles in the sector.
Valuation
Our target price of $45 is based on a 40x multiple to our 2014 adjusted EPS estimate of $1.32 (up from $1.24) discounted to present value at a rate of 12.1%.

Please feel free to share these market letter with friends, family and co-workers.

The e-book Apprentice Millionaire Portfolio is available from http://www.amazon.com

Mangement website http://www.jackbassteam.com

Follow

Get every new post delivered to your Inbox.

Join 1,937 other followers