Zillow Reports Impressive Third-Quarter Results as It Rides a Wave of Euphoria in the Housing Market

Zillow Group reported strong third-quarter results, with the firm benefiting from the unexpected strength of the residential real estate market in the midst of the coronavirus-induced economic downturn. The firm benefited especially from rising revenue in its Internet, media, and technology, or IMT, business that holds its eponymous real estate listings website. During the third quarter, Zillow reported total revenue of around $657 million, a decrease of about 12% compared with $745 million of revenue during the third quarter of 2019. By contrast, companywide third-quarter adjusted EBITDA increased significantly to $152 million, up from around $16 million during the third quarter of 2019. Despite the positive quarterly results, we are maintaining our $40 fair value estimate for no-moat-rated Zillow Group.