Zillow stock, does it have good underlying principles?

Question

Overall how does Zillow fare as a company?

ZG or Zillow Group is a public company.

Does anyone think at any point is it a good investment because of how their business is operated and who is operating it(management)?

The internet and yelp changed the food industry game, for better and worse.

For the real estate world, what kind of impact(what kind of further impact) will Zillow and companies like Zillow have on the industry and do you see it as a positive and negative thing?

Last but not least, do you know anything interesting about the stock or it’s company?

Chris Mason · Answer

Zillow has shuttered their ibuying program within the last week.

Realtors in my area (& this is prior to covid-19) are spending wasting less and less money on them, this was Zillow's primary revenue stream for years.

Zillow mortgage is a joke.

What's the revenue stream you're betting is going to  be going up?

Evan Polaski · Answer

@Jonathan Watt in general I see them continuing to grow, and in doing so continue to capture a large percentage of the overall market.  In Cincinnati, I have spoken to them when I first got my real estate license about being a premier agent.  Many agent friends I know continue to pay for various areas around Cincinnati as they get enough business from it that it more than pays for itself.

Zillow owns DotLoop which is one of the dominating electronic paperwork companies in real estate.  Not the only, but one of the larger.

Zillow Offers could be a big money maker for them. Unlike most wholesalers, they are backed with major financial power and very low cost of capital, so they can typically offer more than others, and hold for longer to get a reasonable sale price.  But we will see how this pans out, since they are limited to what markets this makes sense, and with price corrections happening faster than an algorithm can likely truly take into account, since they need recorded data to build out their pricing structures.

Currently 21 analysts are reporting on ZG, per marketbeat.  11 are hold, 8 are buy and 2 are sell.  https://www.marketbeat.com/stocks/NASDAQ/ZG/price-target/

Slocomb Reed · Answer

The Zillow iBuyer program isn't designed to buy houses for a profit. It's designed to generate referral income for Zillow from the partner agents and teams that Zillow sends its iBuyer leads to. Very similar to their Premier Agent system.

Zillow's instant offer is verified by a real estate agent who meets the seller and walks the property to verify condition (Zillow also does inspections to drop their price further if Seller accepts it) but the agent's goal is to take a listing by showing the seller how much more money they'd net, NOT to talk them into taking Zillow's offer. Agent then pays Zillow a hefty referral fee and they win without having to put out their capital to buy the place. This is how it's playing out in Cincinnati at least.

And their iBuyer program was only suspended due to the market shift. Even if they don't bring it back, there will be some other new way to generate revenue from making referrals to partner agents.

Jonathan W. · Answer

I wonder if being a Premier agent with them is exactly what it is like with OpenDoor. Who is better to work for I wonder. Who is the better contender in finding quality agents. Regardless

That is crazy that Dotloop is not even updated on their main website yet. Looks like they just bought it. I am very happy to read that since it seems to be the direction the CEO should be going with given his background.

How does Zillow manage all that data but more importantly which location is it more effective and correct in? I could tell you if you invested in Jack in the Box, a lot of that risk would be in California fast food restaurants and the environment there. What location would you say Zillow Offers is most present or exposed to? My guess would be they are slow to adjust in numerous markets given their age but that is just a presumption. Zillow can often be viewed as inaccurate.Where are they not and how are they winning it with Zillow Offers?

Jonathan W. · Answer

@Chris Mason it seems like a stock worth pondering. Dominoes pizza went with the tech company that happens to deliver pizzas and if you look at the Zillow CEO, his background and their growing notability/market presence,

you could see a foreseeable leader taking Zillow to a 21st century route that I couldn’t put in words to comprehend but it exists. What I don’t know much about is how they are viewed in all their businesses and how much of that is crucial or part of their overall success.

I am someone who invest with more regards to good leaders at the helm  rather then “all current or outstanding situations” as long as him or her and maybe self to a degree, can understand where the company is heading, how and why it’s aiming towards that point. I mean obviously other things are a factor but their leadership might be the “bet”

Zillow stock, does it have good underlying principles?

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