Members will be familiar with the local ~$33bn REA Group, which operates realestate.com.au. An incredible 12 million Australians are said to visit the site every month. Zillow is a similar-sized US equivalent, which, by definition, is fishing in a much larger pond. This month’s results showed that Zillow is back on track: Total revenue of $US581 million was up +17% and, importantly, ~5% ahead of consensus, sending the stock up 25% on the day. Our position is already up over 70%, but we have no intention of cutting/reducing it at this stage of the cycle.
Zillow is performing well in a tough housing market; when that turns, it should be off the proverbial races. To give an idea of size/scale, they saw 233 million average monthly unique visitors during Q2. While it’s not a cheap stock, in the mode of REA, but the future justifies the price, in our opinion, with our original thesis available here:
- We can initially see Zillow testing $US100– MM is long Zillow in our International Equities Portfolio.
MM is long and bullish ZG US
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