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Zillow - AI Stock Analysis
Analysis generated March 27, 2024
Zillow is an American online real estate marketplace company that was founded in 2006. It created a database that contains more than 110 million homes across the United States, including homes for sale, for rent, and those not currently on the market. Zillow's business model includes selling advertising on the Zillow website to real estate professionals and others, and providing a suite of tools and services for industry professionals. It is also known for its Zestimate home valuation service and for entering the iBuying space with Zillow Offers, which has since been wound down after considerable financial challenges.
Fundamental Analysis
In the last reported quarter, Zillow's revenue was $474M which was a 4.44% decrease from the previous quarter. Although this sequential decrease could raise some concerns, year-over-year revenue growth stands at 8.97%, which suggests that in the larger context, the company is still experiencing positive growth. Net income is at $73M, suffering a sharp fall of 160.71% from the quarter before, which may highlight volatility in profitability. However, it is nearly flat on a year-over-year basis with a 1.39% decrease. EBITDA was reported at $92M, which represents a decrease of 170.59% from the preceding quarter but an 8.00% increase compared to the same quarter last year, indicating mixed signals on the operational effectiveness. It is important to note that several insiders have been selling their stock, which sometimes indicates that those with the most insight into the company anticipate a potential decline in stock value.
Technical Analysis
Zillow's current stock price is $49.40. There has been a 6.21% decrease over the past month, which may be a concerning signal in the short term. However, the stock has appreciated 18.66% over the past year, suggesting a favorable long-term trend. The short-term moving average (SMA10) is $52.53, slightly lower than the previous SMA10 of $52.83, indicating that the stock might be entering a downtrend. The Relative Strength Index (RSI) is 68.9, which suggests the stock is neither overbought nor oversold at the current levels, hence indicating a neutral condition.
Alternative Data Analysis
In terms of alternative data, the company is currently showing signs of expansion with a 23% increase in job postings over the last few months. Zillow's employee sentiment and business outlook indicators are trending upward by 5%, which can be a precursor to future growth and stability. Customer acquisition metrics are especially promising, with webpage visits at an estimated 334M and growing by 19% recently - an indication of growing market interest and potential revenue opportunities. Additionally, daily app downloads have surged by an impressive 48%, signaling strong consumer engagement and adoption of Zillow's mobile platforms. However, social media metrics present a mixed picture, with Instagram follower counts remaining flat and Twitter followers showing no significant decrease or increase.
Conclusion and Recommendation
The analysis reveals a complex but cautiously optimistic picture for Zillow. The company is showing signs of robust customer engagement and market presence growth, as evidenced by their digital footprint and progressive hiring trends. At the same time, some financial metrics and insider trading activity warrant a careful approach. Potential investors must weigh the opportunity in Zillow's latent growth against the signals of instability in revenue and profitability changes. Given the mixed data, investors might consider a hold strategy with Zillow stock, keeping a close eye on upcoming quarterly results and market conditions to reassess as more data becomes available.
