Analyst Note
| Michael Wong, CFA, CPA |Zillow Group reported strong first-quarter results that exceeded the upper end of its quarterly guidance. The company reported net income of $52 million on $1.2 billion of revenue, with revenue increasing 8% from a year ago and 54% sequentially. The company reported total revenue of $1.218 billion compared with the upper end of its guidance range at $1.112 billion and total adjusted EBITDA of $181 million compared with the upper end of its guidance range at $138 million. All three of the company’s segments exceeded their guidance. Zillow’s homes segment benefited from the strong appreciation of the homes that it bought and was the primary driver of the sequential revenue growth. The Internet, media, and technology segment continued to benefit from high site traffic, while the mortgage segment benefited from the continued high interest in mortgage refinancing. We don’t anticipate making a significant change to our $42 fair value estimate for no-moat Zillow.