Zillow Stock Analysis


Zillow $ZG $Z recently announced that they are closing their house flipping business (which is their largest revenue segment) and Cathie Wood (Ark Invest) $ARKK decided to sell most of her shares in the company, crashing the stock further.


Zillow is the largest online real estate marketplace in the US. They own their largest competitor, Trulia, and many other companies. Zillow Group owns about 0.1% of the total market share. Zillow makes money by allowing real estate agents to post ads. Zillow also recently started a mortgage origination business.


Another business that Zillow started recently is iBuying, that is, using algorithms to buy houses then sell them in 3-6 months. In other words, speculating. They lost money as expected. That's why they decided to close this business.


Zillow now has 7000 houses (worth over $3 billion) to sell. In the next 2 years, we can expect revenues to be as high as they are today. But after that, revenues will fall as they return to their normal business. But lower revenues should not worry us as the company will be profitable again.


Will I buy Zillow? It is on my watchlist for the time being


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