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Zillow Group Inc A ZG

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Economic Moat




No-Moat Zillow Reports Strong Top-Line Results; iBuying Segment Warrants Caution

Yousuf Hafuda Equity Analyst

Analyst Note

| Yousuf Hafuda |

No-moat-rated Zillow Group reported better-than-expected results that beat S&P Capital IQ consensus estimates from a top-line perspective. This was buoyed by a strong performance in the housing market in spite of broad economic uncertainty due to the COVID-19 pandemic. Revenue increased 28% year over year, with homes revenue up 82% year over year since the company resumed its home-buying operations. Adjusted EBITDA came in at $15.8 million, far surpassing management expectations of a loss of approximately $60.5 million on a consolidated basis. This measure outperformed expectations on a segment basis as well, as the IMT segment (particularly Premier Agent) delivered stronger results than our and management's expectations. The company purchased 86 homes and sold 1,437 homes over the quarter. However, the purchases are not reflective of commitments made to buy homes later in the year. 

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Company Profile

Business Description

Zillow Group is an Internet-based real estate company that provides access to services such as buying and selling of houses, rental listings, and mortgage financing via mobile applications and websites such as Zillow, Trulia, and StreetEasy, among others. It operates through three segments based on the business operations and services provided. The homes segment, which accounts for roughly half of its revenue, includes income generated via direct purchase and sale of houses. The Internet, media, and technology segment and the mortgage segment both generate revenue through sale of various advertising, marketing, and technology products to real estate professionals and mortgage lenders. The company primarily operates in the United States.

1301 Second Avenue, Floor 31
Seattle, WA, 98101
T +1 206 470-7000
Sector Communication Services
Industry Internet Content & Information
Most Recent Earnings Mar 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Distressed
Employees 5,344