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Zillow (ZG) Touches a New 52-Week High: Time to Hold?
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On Jun 17, 2015, shares of Zillow Inc. (ZG - Free Report) hit a 52-week high of $34.75. The stock eventually closed at $34.16, representing a one-year return of 20.7% and a year-to-date return of 31.2%. The average trading volume for the last three months aggregated approximately 836K shares. The overall long-term expected earnings growth rate for this stock is 30%.
What is Driving the Stock Upward?
On May 3, 2016, Zillow reported mixed first quarter fiscal 2016 results. Although the company’s adjusted loss per share was wider than the Zacks Consensus Estimate, its top line surpassed the same.
During the first quarter, Zillow’s top line grew 25% to $186 million on a year-over-year basis. It surpassed the Zacks Consensus Estimate of $176 million. The significant year-over-year increase was primarily due to the Trulia acquisition. Also, a 23% surge in Marketplace revenues drove the quarter’s results.
Within Zillow’s Marketplace segment, Real Estate marketplace (comprising Premier Agent, Diverse Solutions, Rentals and StreetEasy product lines) revenues soared 34% year over year driven by strong agent additions.
During its first quarter earnings release, Zillow raised its fiscal 2016 guidance. For fiscal 2016, revenues are now expected to be roughly $825 million to $835 million (previously $805 million to $815 million). The Zacks Consensus Estimate is pegged at $832 million.
Zillow offers mobile and web solutions that enable users to find important information about homes. The company reported modest fourth quarter results. Although the company posted a loss during the quarter, its revenues witnessed tremendous year-over-year growth.
We believe that strong traffic growth, frequent product launches and the growing Agent business are positives. In particular, product launches like Zillow Real Estate and Zillow Digs App for Apple Inc.'s (AAPL - Free Report) iPhone and iPad are expected to drive growth.
Moreover, the Trulia acquisition will not only make Zillow the number one online real estate information provider in the U.S., but also help it to compete against Move Inc., which has now been acquired by News Corp.
Apart from acquisitions, Zillow entered into several partnerships with real estate listing companies and real estate brokers to enhance its product portfolio. However, the company is currently in the high investment phase and therefore profitability might be an issue in the near term.
Zillow currently carries a Zacks Rank #3 (Hold). Stocks worth considering include Facebook, Inc. , sporting a Zacks Rank #1 (Strong Buy) and DST Systems Inc. , carrying a Zacks Rank #2 (Buy).
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Zillow (ZG) Touches a New 52-Week High: Time to Hold?
On Jun 17, 2015, shares of Zillow Inc. (ZG - Free Report) hit a 52-week high of $34.75. The stock eventually closed at $34.16, representing a one-year return of 20.7% and a year-to-date return of 31.2%. The average trading volume for the last three months aggregated approximately 836K shares. The overall long-term expected earnings growth rate for this stock is 30%.
What is Driving the Stock Upward?
On May 3, 2016, Zillow reported mixed first quarter fiscal 2016 results. Although the company’s adjusted loss per share was wider than the Zacks Consensus Estimate, its top line surpassed the same.
During the first quarter, Zillow’s top line grew 25% to $186 million on a year-over-year basis. It surpassed the Zacks Consensus Estimate of $176 million. The significant year-over-year increase was primarily due to the Trulia acquisition. Also, a 23% surge in Marketplace revenues drove the quarter’s results.
Within Zillow’s Marketplace segment, Real Estate marketplace (comprising Premier Agent, Diverse Solutions, Rentals and StreetEasy product lines) revenues soared 34% year over year driven by strong agent additions.
During its first quarter earnings release, Zillow raised its fiscal 2016 guidance. For fiscal 2016, revenues are now expected to be roughly $825 million to $835 million (previously $805 million to $815 million). The Zacks Consensus Estimate is pegged at $832 million.
Zillow offers mobile and web solutions that enable users to find important information about homes. The company reported modest fourth quarter results. Although the company posted a loss during the quarter, its revenues witnessed tremendous year-over-year growth.
We believe that strong traffic growth, frequent product launches and the growing Agent business are positives. In particular, product launches like Zillow Real Estate and Zillow Digs App for Apple Inc.'s (AAPL - Free Report) iPhone and iPad are expected to drive growth.
Moreover, the Trulia acquisition will not only make Zillow the number one online real estate information provider in the U.S., but also help it to compete against Move Inc., which has now been acquired by News Corp.
Apart from acquisitions, Zillow entered into several partnerships with real estate listing companies and real estate brokers to enhance its product portfolio. However, the company is currently in the high investment phase and therefore profitability might be an issue in the near term.
Zillow currently carries a Zacks Rank #3 (Hold). Stocks worth considering include Facebook, Inc. , sporting a Zacks Rank #1 (Strong Buy) and DST Systems Inc. , carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>