|Day's Range||3.2600 - 4.0400|
Over the last four-and-a-half years shares of Zillow Group (NASDAQ:Z, NASDAQ:ZG) have ticked higher. However, the ride has been a volatile one, punctuated with extreme swings toward both ends of the vertical spectrum. Since October of last year, Z stock has been on a blisteringly bullish ride. Given its recent history, though, it's fair to ask how this rally will hold up.Source: OpturaDesign / Shutterstock.com As you know, Zillow Group is an online real estate database company, providing buyers and sellers valuable residential information. For me, housing is a fascinating topic because it's where the rubber meets the road. Government agencies can finesse certain economic metrics but not real estate: you either have a home or you don't.Thus, the wild swings suggest that while Z stock may offer traders substantial profitability at specific intervals, Wall Street is apparently digesting housing data to get a better read on the real economy. As such, how you ultimately approach Zillow may depend on your confidence of our country's fiscal health and performance.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 20 Stocks to Buy From the Law of Accelerating Returns Let's take a look at both the positive catalysts for Z stock, as well as key risk factors. Demographic Trends Strongly Favor Z StockAmong the most significant changes in America over the last 15 years or so is the student debt crisis. With educators emphasizing college as practically the only platform for success, applications for higher education have soared. Naturally, tuitions skyrocketed, but to truly unsustainable levels.Now society is picking up the tab. According to various studies, home ownership rates for millennials is lower than that of prior generations when adjusted for age. With many millennials starting off their careers in one of the worst job markets via the Great Recession, this has added to the frustrations many young people face.Furthermore, the recession caused many baby boomers to bunker down, which didn't help ease the supply-demand dynamic. With less inventory available in major metropolitan areas - where unsurprisingly millennials prefer to live due to better job opportunities -- housing prices increased dramatically.But with improving economic conditions, baby boomers are ready to downsize. Or they just might die. Either way, some analysts have termed this demographic trend a "silver tsunami." At some point, we'll see an influx of supply, which theoretically should help ease pricing concerns for millennials. This translates into more real estate activity, bolstering the case for Z stock.Plus, Zillow has two related demographic catalysts. First, U.S. fertility hit a post-World War II peak in 1960, with each woman averaging 3.58 babies birthed. Those infants are now around 60 years old and rapidly facing retirement age.Second, from 1997 through 2007, the birth rate steadily moved higher from 3.88 million newborns to 4.32 million. These people will soon be entering the workforce with gusto, if they haven't already. Therefore, over the next few years, we'll see more supply meeting more people with extra funds. Affordability Remains a Huge RiskIn the last State of the Union address, Democrats took exception with President Donald Trump's characterization of a robust economy. To be fair, they're not entirely wrong.Based on headline numbers, the job market is booming, the stock market is scorching hot, and housing has revived. But if the economy was truly doing well, our infrastructure wouldn't be crumbling. I don't know about where you live, but in my neck of the woods, I need a 24/7 access to a chiropractor because the roads are terrible.Moreover, in several metropolitan areas, homelessness is out of control. Again, if the economy was so wonderful, we really shouldn't see such abject poverty rippling throughout the country.One of the reasons why we don't "feel" Trump's version of the economy is that we don't have his billions (or millions). But in all seriousness, it has to do with housing affordability. Adjusted for inflation, we're living in one of the least affordable real estate markets in American history. Click to Enlarge Source: Chart by Josh Enomoto Back in 2006, lack of affordability hit an all-time peak. That was when the home price-to-wage ratio hit 8.73. Specifically, a house cost 8.73 times the average salary of a non-supervisory employee. Today, the ratio has dipped to 7.76, which is still bad. The ratio was under four between 1964 through 1970 (the U.S. went off the gold standard in 1971).From 1964 till today, the average home price-to-wage ratio is 6.22. In order for housing to make sense now, we really need to move toward that ratio. Sure enough, the trend suggests that we are. But this also implies that we're heading toward another housing correction, which may not help Z stock. How to Approach ZillowBefore the 2000s era housing crisis, the last time unaffordability peaked was in 1989 at a ratio of 7.26. It took 13 years before we saw that same ratio again.Interestingly, 13 years from 2006 is basically where we are today. But unaffordability is not growing but rather falling. Are housing prices going to correct? Perhaps.On the optimistic side, though, Z stock may still benefit from the coming real estate transactions. Sure, younger people may not want to buy homes in areas where most baby boomers own their property. However, these millennials and members of Generation Z would by then approach an age where settling down is becoming a priority over other concerns.It's a strange circumstance we're facing. The U.S. economy doesn't look too hot in context. But we've got to live somewhere. Ultimately, this may lift Z stock longer term.As of this writing, Josh Enomoto is long gold. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 20 Stocks to Buy From the Law of Accelerating Returns * 10 Strong Lottery Ticket Stocks That Could Soar in 2020 * 7 U.S. Stocks to Buy on Coronavirus Weakness The post Z Stock Could Win but the U.S. Might Not appeared first on InvestorPlace.
The last time I wrote about Zillow Group (NASDAQ:Z, NASDAQ:ZG) was in December 2018. At the time, Z stock had dropped 31% over three months, prompting me to suggest investors buy on the dip.Source: OpturaDesign / Shutterstock.com Up 57% in the 14 months since, I see the company's latest initiatives as the first of many moves to get its share price back above $100, possibly as high as $150 where it traded in July 2014.However, with 27% of its shares shorted, it has its work cut out for it.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Zillow Offers More for Home BuyersMy primary motivation for picking Zillow as a stock to buy on its double-digit dip was Zillow Offers. At the time, it was less than eight months into launching "Instant Offers" in Las Vegas and Phoenix, a new business for the company that would see it buy and sell homes. * 7 Exciting Stocks to Buy for Aggressive Investors Investors did not like the idea of the company wandering into other areas of the real estate market, but Zillow doubled down on its move into the buying and selling of homes by acquiring Mortgage Lenders of America in November 2018. By purchasing a mortgage lender, it was helping streamline the home-buying process.Fast forward to 2020.Zillow announced in late January that it was partnering with 10 regional homebuilders in Georgia, North Carolina, Texas, Florida and California. The homebuilders will provide customers and Zillow will buy their old homes with closings as long as eight months, making the process of purchasing a newly constructed home as easy as possible.Motley Fool's Steve Symington called the partnership "a win-win-win" for everyone involved, pointing out that 16% of newly-constructed home purchases are canceled because homebuyers are unable to sell their homes in time to close the purchase.I know from my brother's experience that it can be a nightmare trying to time real estate closings while chasing down additional financing.The addition of these 10 regional homebuilders with the homebuilders it already announced in September 2019 gives Zillow Offers serious coverage across the country.Zillow management believes that within the next 3-5 years, it could be buying as many as 60,000 homes annually through Zillow Offers, generating as much as $20 billion in yearly revenue. Shorts Fail To See The Big PictureIt's easy to see why 27% of its stock is short. In the first nine months of 2019, the company's homes segment had revenue of $762 million.That's the good part. However, on the bottom line, it lost $158.8 million in adjusted EBITDA.But remove the Homes segment from Zillow's business -- that includes excluding the Mortgages segment because it doesn't need mortgage origination without the buying and selling of homes -- and you get a company that had an adjusted EBITDA margin of 22.6%. That's a heck of a lot more attractive.What investors betting against Z stock fail to see is the bigger picture.Like Amazon (NASDAQ:AMZN), Zillow is looking to control an important part of the home-ownership experience. Given Amazon's desire to sell consumers everything they need in their homes and lives, I could see Amazon buying Zillow in the future.My advice to Jeff Bezos: Make an offer sooner rather than later. It will be better for all shareholders, including yourself. How Does Zillow Offers Get Z Stock to $150?The simple answer is, it doesn't. It gets Z stock out of the rut that's had it trading in a range between $25 and $50 since August 2015.To get to $150, it's got to have all three segments generating positive adjusted EBITDA margins. Currently, while the Internet, Media, and Technology (IMT) segment has an adjusted EBITDA margin 23%, the Homes and Mortgages segments have margins of -21% and -19%, respectively, for an overall 2% margin.Let's assume that these margins flip from negative to positive. Zillow's adjusted EBITDA would change from $42.1 million to $403.2 million and an overall margin of 22.4%.Zillow currently trades at 4.8 times sales. Assuming it has a 10-fold increase in adjusted EBITDA and an increase in the price-to-sales ratio to 20, Zillow's market cap would grow to $43.2 billion.Based on 58.5 million shares outstanding, that's a stock price of $738.46. Naturally, I don't think that's going to happen anytime soon. However, in 2-3 years, it's not unrealistic to see Z stock hit $150.If I had a gun to my head and had to choose between shorting its stock and going long, I'd go long every day of the week and twice on Sundays.Despite being 76 cents from a 52-week high, I still think Zillow's a screaming buy.At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Exciting Stocks to Buy for Aggressive Investors * 20 Stocks to Buy From the Law of Accelerating Returns * 7 U.S. Stocks to Buy on Coronavirus Weakness The post Whatas It Going to Take for Zillow to Get Back to $150? appeared first on InvestorPlace.
Seattle Mayor Jenny A. Durkan and King County Executive Dow Constantine today unveiled a new Zillow-powered search tool to help match local nonprofit service providers and their clients experiencing homelessness with owners of affordable vacant rental units.
People spend an overwhelming share of their lives at home or at work, and new Zillow research shows how decisions about one are closely tied to the other.
Buying or selling a home can signal the beginning of a new phase in a couple's life together, but a new survey commissioned by Zillow and conducted online by The Harris Polli finds those two transactions are often fraught with conflict.
Zillow (ZG) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Home price increases in North Texas will likely continue to decelerate in 2020 and fewer homes will sell for above list price as the residential market here, like in much of the nation, cools.
This is the latest entry in Benzinga's "Short Squeeze Potential" series. The article aims to make readers aware of a stock with short squeeze potential. Zillow Group Inc (NASDAQ: ZG)(NASDAQ: Z) shares have had a good run over the last month.
The share of Charlotte-area homes selling above asking price dipped in 2019, following a national trend in which that percentage dropped to its lowest point in three years, according to a new report by residential real estate company Zillow Inc.
As the housing market returned to normal after a frenzied couple of years marked by intense bidding wars in many markets, the smallest share of homes sold for above their list price last year than in any year since 2016.
The home may need serious renovation but that didn't affect the selling price for the founder and CTO who purchased it.
A recent report by Zillow found Florida’s housing market gained over $9.2 billion in value in 2019 alone. The area’s housing market value sits at $265.6 billion, according to Zillow. Only Miami had a larger total value, $658.1 billion, and larger decade increase with $269.1 billion added.
Rebekah Bastian, Zillow's vice president of community and culture, runs a 15-person team that focuses on employee engagement to equitable products.
Las Vegas is the most popular U.S. destination for non-local home shoppers, Minneapolitans don't want to move out of the area -- and hardly anybody else wants to move in -- and Texans seem to mostly love living in Texas. These are just a few of the takeaways from a new Zillow® analysis of search data in the largest U.S. markets that provides a glimpse of where Americans aspire to find their next homei.
Zillow Group, Inc. (NASDAQ: Z) (NASDAQ: ZG), which is transforming how people buy, sell, rent, and finance homes, today announced that it will release the company's fourth quarter and full year 2019 financial results after the market close on Wednesday, February 19, 2020. Zillow Group will host a live conference call and webcast to discuss the results that afternoon at 2 p.m. PT / 5 p.m. ET.
Experts agree that a steep decline in Austin's housing inventory is causing single-family home prices to skyrocket. It's also leading to some wacky scenarios, like median resale prices higher than median new home prices. Click through to understand more of the situation, including possible reasons for optimism.
Zillow Group, Inc. (NASDAQ:Z) (NASDAQ:ZG) today announced that on January 24, 2020, the Compensation Committee of its Board of Directors granted equity awards to purchase an aggregate of 337,671 shares of its Class C stock to compensate 130 new employees under the company's 2019 Equity Inducement Plan.
A recent report from Zillow found Tampa's home inventory dropped over 10 percent last year. This corroborates a separate report from Realtor.com.
The decade in which Charlotte bounced back from the Great Recession brought with it big gains in housing values.
The price threshold for Manhattan luxury homes, which constitute the top 20% of the market, fell to its lowest level since 2013, according to the Q4 2019 StreetEasy Market Reportsi. To land in the luxury tier, homes had to be priced at or above $3,816,835 — a 6.1% drop from the top threshold in the previous year.
The Puget Sound region economy is humming along with continued strong job growth and a housing market that's heating up again. The region's economy has been relatively stable since the end of the recession, with modest economic and employment growth, low inflation and low interest rates, Seattle University business school Dean Joseph Phillips said at the Business Journal's Jan. 17 Outlook 2020 event. "It's coming but economists can't say when." Job growth is the foundation of the economy, and Outlook 2020 speaker Chris Mefford expects that to continue but not as robustly as last year.
Dallas-Fort Worth total housing value doubled in a decade, hitting $589 billion and topping all Texas markets. A Zillow economist breaks down what he sees going on in the DFW market.
The Austin-area housing market added $141 billion in value in the past decade, according to Zillow Group. Another interesting data point from this new report: Austin was one of two large markets where most of the growth came from new home construction and not appreciation of existing homes. Click through for more details and some context from local experts.
The total value of every home in the U.S. is $33.6 trillion, nearly as much as the GDP of the two largest global economies combined -- the U.S. ($20.5 trillion) and China ($13.6 trillion) -- according to a new Zillow® analysis.
Zillow today announced new partnerships with regional homebuilders across the country to give home shoppers an easier and more convenient way to move into their dream home. The partnerships help home sellers move into their new construction home without the hassle and stress of selling their existing home traditionally, by using Zillow Offers.