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On Apr 16, Zacks Investment Research upgraded Zillow Inc. (Z - Snapshot Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

The company has witnessed rising earnings estimates since it reported solid fourth-quarter results. The company delivered positive earnings surprises in the last 3 quarters of 2012 with an average beat of 411.1%. The long-term expected earnings growth rate for this stock is 30%.  

Over the last 30 days, 1 out of 3 estimates moved north, pushing the Zacks Consensus Estimate for 2013 by 2 cents.

The year-to-date return for the stock came in at 97.3%, way above NASDAQ’s return of 4.9%.

The company has undertaken a number of initiatives to upgrade its services. In Feb 2013, Zillow opened a new office for Zillow Rentals and HotPads acquired in 2012 in San Francisco. In the same month it launched a dedicated rental app for iPad named Zillow Rentals. Rental shoppers using iPad can use Zillow Rentals to search via GPS by specifying a location on the map.

Again, the company enhanced its free online portal, Agent Hub in Mar 2013. The endeavor aimed to augment Zillow’s efforts to convert contacts to active customers, thereby generating more revenues.

Additionally, in order to acquire more customers, the company introduced a Spanish-language support for the Zillow Rentals Android App in Mar 2013. This is expected to enhance its Spanish customer base by helping the native Spanish speakers search for rental homes with greater convenience.

Further, the company is working towards business expansion. Towards this end, Zillow partnered with Engel and Volkers, a premium residential real estate company and HUNT Real Estate ERA, the largest family-owned real estate business in New York state and Phoenix, in Feb 2013. Zillow will now market the listings of the companies through the Zillow Real Estate Network.

Other Stocks to Consider

Among others in the industry, Shutterfly Inc. (SFLY - Analyst Report), carries a Zacks Rank #1 (Strong Buy) while Angie’s List Inc. (ANGI - Snapshot Report) and Bankrate Inc. (RATE - Snapshot Report) carry a Zacks Rank #2 (Buy).

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