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Zillow, Inc. Message Board

  • chickenhatsdotcom chickenhatsdotcom Nov 12, 2012 5:43 PM Flag

    Forward P/E of 36 here at $24.57 and 120% EPS growth next year ......

    Stay scared if you'd like, but with all the mobile opportunities coming up and new sources of revenue, I'm getting more and more excited, especially with this big short interest to provide fuel. This is the time to buy, not panic. A forward P/E of 120 is warranted based on the EPS growth rate, so you could actually say that if the stock traded at $81.81, it would NOT be considered extremely pricey for a growth stock. Sounds crazy, but them's the facts folks. The slightest good news and this rockets upward.

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    • i think you need to understand valuation. i actually like zillow as a company, but from a valuation standpoint it was wayyy overvalued. in the 40s it was priced for perfection, wall st already pricing in "beat" on rev. it was not the slight decrease in rev that dragged the price, but the realization that growth may be stalling. what you're seeing now is the Z business model being priced in and even here Z may be growing into its valuation. would argue that even here with a p/e of ~140 and a forward p/e ~36 it is still overvalued. a forward p/e of 15-20 would be more reasonable. your argument for EPS growth rate must take into account that the street already knows about that guidance and has priced it in-thus you cannot assume that EPS growth will lead to higher SP.

      of course this could change very quickly is they are able to demonstrate more areas of growth and rev. but it won't be back to 40s. expecting this to drop below 20 and next earnings will be interesting.

    • What is a mobile opportunity? I can sit in my car and look up a home in any neiborhood (on my Iphone, tablet ect) on realtor.com. That's free. Call the agent and see the inside of the house. What's the big deal? If I'm a realtor and I sign up with Zillow. what do I get then? I think everyone likes to say mobile because it sounds catchy. How do these guys make money ads? memberships. What do you get?

    • You might want to take another look at the estimates, Chickenshitinhishat! Consensus estimates suggest 74% EPS growth ('13 vs '12), but only 43% revenue growth. Your use of growth rate as a proxy for expected P/E (growth % = P/E) is more valid for more mature businesses and should only be used in cases such as Titwillow's when you consider the longer term growth rate. Will Titwillow's EPS grow 74% in '14 versus '13? Will its revenues continue to compund at 43%. Give the conference call that apparently put you to sleep, one wonders how the company will achieve the kind of margin expansion that estimates suggest, given the expense initiatives that were discussed -- remember, the expense initiatives are not expected to translate quicly into revenue, evidenced by expected growth of revenue that is slower than earnings, a trend that is not sustainable.

 
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104.46-0.140(-0.13%)Dec 26 4:00 PMEST

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