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Zillow Group, Inc. Message Board

  • flankenking flankenking Aug 14, 2013 10:46 AM Flag

    Zillow extreme overvalued - Local Corp extreme undervalued - only stupid idiots don't change

    Zillow extreme overvalued - Local Corp extreme undervalued - only stupid idiots don't change

    Income Statement of Local Corp (Market Cap = 38.2 million):
    • Sequential revenue growth up 6% to $22.7 million in Q2 from $21.5 million in Q1
    • Adjusted EBITDA up 72% to $1.2M in Q2 from $685K in Q1
    That are on a yearly base only 0.45-times-revenues of Local Corp.

    Zillow has 21-times-revenues - that is the excact the 50-fold valuation of the idiotic low 0.42-times-revenues of Local Corp.

    Income Statement Get Income Statement for Zillow (Market-Cap = 3,280 million):
    View: Quarterly Data All numbers in thousands
    Period Ending Mar 31, 2013 Dec 31, 2012 Sep 30, 2012 Jun 30, 2012
    Total Revenue 38,966 34,337 31,915 27,765
    Operating Income or Loss (3,802) 511 2,295 1,298

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    • The Seattle-based Zillow reported a non-GAAP profit of a penny a share on $46.9 million in revenue for the second quarter.

      Zillow (Z) guides on its Q2 CC for Q3 revenue of $49.5M-$50.5M.

      An increase from 46.9 million to only 50 million in a one quarter is very bad for a company with about 25-times-revenues, because the growth of revenues from Q2/2013 to Q3/2013 is only 6.61% growth or 29.1% on a yearly base.

      • 1 Reply to flankenking
      • Edward Woo - Ascendiant Capital
        Okay. And you've got some better results this quarter, is that the upside you expect -- for you to raise your guidance, or do you see the momentum continuing in the back half?

        Heath Clarke - Chairman and CEO
        Yeah. We see the momentum continuing in the back half, which is the main reason. It's not that we necessarily overperformed in Q2, . That said, at the mid range, we did $44 million in Q1 and we expect to do about $52 million in -- excuse me, in first half and second half of that $52 million.

        Source: Transcript of Conference Call - Read the complete transcript direct on Seeking Alpha Less

        A growth of 8 million from 44 million in the first half of 2013 to 52 million in the second half of 2013 is a growth of revenues from the first half of 2013 to the second half of 2013 of 18% - or 39% on a yearly base.

        That is a higher growth by Local Corp than by Zillow from Q2 to Q3.

    • Only stupid manipulated idiots don't hurry with a change.

    • Best Message from last Conference Call: 3.75-fold monetizing of traffic is a dramtic increase

      " We continue to invest to make tremendous progress in mobile. Mobile traffic is at record levels, up 6% consecutively and up 79% over the year ago period. In our regional testing on mobile traffic, we monetized only 20% of the [rated] [ph] desktop traffic. That was a huge gap. To address this, we launched the mobile testing platform during the second quarter, and I am very pleased to report that we now monetize mobile traffic on our network at about 75% of the [rated] [ph] desktop traffic, a huge improvement over the past quarter alone"

      Source: Transcript of Conference Call - Read the complete text direct on Seeking Alpha. Less

      If this development will continue, we will see a jump in revenues, EBITDA and Adjusted Net Income from Operations of Local Corp, because not only the monetization jumping - the traffic, too:
      .Local Corp Mobile Traffic

      Q1-12: 12 million

      Q2-12: 19 million

      Q3-12: 25 million

      Q4-12: 25 million

      Q1-13: 32 million

      Q2-13: 34 million

    • Growth Strategy of Local Corp (Source: Newest Presentation)
      • Grow margins in O&O business (largest revenue stream)
      - Margin optimization via new SEM tools
      - Gradually ramping in the UK

      • Grow revenues in Network (highest gross margin revenues)
      - Expand number of sites via business development team (more traffic)
      - New products planned including world-class local shopping channel
      - Optimize monetization leveraging new testing platform

      • Developing opportunities
      - Local display network – leveraging our existing Network
      - Microsites (insurance,HVAC, alarm systems and more) – leveraging our platform
      - Improved monetization vialead generation – monetization improvements
      - Mobile – leveraging our platform Less

    • Few Companies Have Been Cheap at Over 20x Revenues

      Based upon its last four quarters, Zillow now sells at 23 times revenues. Very few publicly-traded companies have turned out to be good investments at over 20x revenues. The simple truth is that it's difficult for a company to 'outperform' the broader market with such huge expectations priced into the stock already.

      It's not completely impossible, mind you. Apple would've been a great investment at almost any price in 2000. Of course, that was a turn-around story where Apple introduced wildly successful new products that the market had not anticipated. That seems very unlikely here.

      Google is another great example. At the end of 2005, Google traded at 22 times revenues (thanks to an assist from Conor Sen for this info nugget). We can examine the company and the stock over the 7-yr period from the end of FY 2005 to the end of FY 2012.

      As you can see, Google achieved annualized growth of 35% in revenues, 29% in operating margins, 33% in earnings, and 30% in earnings per share. That's an astounding track record over a 7-year period and you'd hard pressed to find many companies in the US over the past few decades that could match that.

      In spite of that otherworldly run of growth, Google's stock achieved a modest 6.8% annualized return over that same 7-year time frame. It's a respectable return given that the S&P 500 only returned 1.9% annually over the same period, but it's not the 'blow-you-away' type of returns that might be implied by 30% annual earnings growth. Indeed, if you invested in a 7-yr treasury bond at the same time, you would've generated a 4.32% yield.

    • Trulia has only the 1.3-fold revenues of Local Corp, but the 41-fold market-cap

      Income Statement of Local Corp (Market Cap = 36 million):

      • Sequential revenue growth up 6% to $22.7 million in Q2 from $21.5 million in Q1

      • Adjusted EBITDA up 72% to $1.2M in Q2 from $685K in Q1

      Income Statement of Trulia (Market Cap = 1,490):

      Second quarter revenue of $29.7 million, up 77% year-over-year.

      Adjusted EBITDA for the quarter was $3.4 million, compared with -$1.8 million in the second quarter of 2012

    • You should short or keep your mouth shut

16.78+0.58(+3.58%)Feb 10 4:00 PMEST