Z - Zillow: Surging Rentals Helps To Affirm The Bull Case For This Housing Super App

2024-06-05 16:09:10 ET

Summary

• Zillow's shares have dropped over 25% this year, creating an opportunistic buying window for longer-term investors.
• Zillow's Rentals business is growing at over 30% year-over-year and addresses a $25 billion TAM. This is helping to pad slower growth in other areas of the business.
• We shouldn't ignore the fact that prior-year comps are also getting easier, however, and Zillow's Residential arm is seeing growth re-accelerate.
• Adjusted EBITDA is also growing at a +20% y/y clip.

For several years now, Zillow ( Z ) has been in the doldrums. The real estate company has dealt with an overhang of weaker housing demand post-pandemic, plus the uncertainty with the upcoming enforcement of the NAR ruling change that upends the traditional buyer/seller agent fee split. Against this backdrop, shares of Zillow have lost more than 25% of their value year to date, sharply underperforming the S&P 500....

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