Zillow, Inc. Message Board

Stock price bases on actual vs. Estimates.
z will go higher.

Very easy to see why Zillow lost 11 cents a share compared to analysts projections of a loss of 3 cents a share. They are BUYING revenue, simple as that. Revenue increased by 70.7% compared to same quarter last year, but Expenses increased by 102.3%. Sales and Marketing expenses increased by 138.1% on a like for like basis. So it seems they have a sweatshop sales department cold calling Realtors in a desperate attempt to sign up Premier Agents. Unfortunately the incremental revenues generated didn't come close to covering the incremental costs. Anyone can grow revenue by 70% like Zillow did ,but that level of growth is a massive failure for a company with a PE ratio of 350 especially as they throw money at buying the revenue.

Other costs are equally out of synch with revenue growth; Technology & Development costs increased by 111%, and G&A costs increased by 85%. Zillow is failing to achieve any economies of scale as it grows. It has substantial intangible assets on its balance sheet in respect of Goodwill and costs incurred that it is amortizing. Not looking good at all for future and one has to think of possibility for an impairment write off at some time.

Full disclosure: I am a Zillow cynic who has serious issues with how Zillow imposes substantially inaccurate Zestimates on private homes and refuses ALL requests to correct or delete these erroneous valuations when requested to do so by the homeowner. This is totally unacceptable in any fair minded society especially when 17% of Zestimates are more than 25% incorrect.

Been watching this thing before last earnings. Will open at 61. All the weak investors will sell right off the bat because they fear it will go down 80% in one day. Shorts will come in and keep stock at 60.50. Smart money will be buying hand over fist. This was a great quarter, the smart investor understand why EPS was low. They will also understand that revenue crushed estimates. Once they see the stock gaining traction around 10 am Seattle time, the weak shorts will start covering. Buying will continue. Stock will then start getting squeezed at 62. Investors are irrational, on both sides. I'm just going with the winning side.

Thanks for the dip. Hehe

Sentiment: Strong Buy

no shares to short..means...

Sentiment: Strong Buy