By Timothy Lutts, Chief Analyst, Cabot Stock of the Week
From Cabot Wealth Advisory 7/4/16 Sign up for Cabot Wealth Advisory—it’s free!
More Americans now search for the word ‘Zillow’ than the word ‘real estate.’ Those were the words of Zillow (Z) CEO Spencer Rascoff during the real estate website’s latest first-quarter earnings call. Zillow’s online traffic has been trending upward ever since the company bought out Trulia, its biggest rival, for $3.5 billion last April.
More people are searching for houses online than ever—total traffic has grown by 55% in the last three years. And Zillow owns the lion’s share of that search traffic, with a 63% market share.
The company reported 25% pro-forma sales growth in the first quarter, and upped its full-year guidance to a range of $825 million to $845 million—well ahead of the $795 million consensus analyst estimate.
Note: This stock is in an uptrend today but won’t be forever. So while you could just jump in today and take your chances, what I really recommend is that you get the latest advice of the man who wrote those recommendations over the past few months, Cabot’s own Mike Cintolo. As Senior Growth Analyst, Mike has his pulse on the top-performing stocks of the market every day of the week. His weekly Cabot Top Ten Trader is required reading of all investors/traders looking to get the biggest bang for the buck today, as it ensures that you’re always invested in the market’s hottest, highest-potential stocks. Click here to join today!
From Cabot Wealth Advisory 7/19/12 Sign up for free Cabot Wealth Advisory e-newsletter
Zillow (Z) is the leading online real estate website. The big idea here is that real estate agents spend about $6 billion per year in advertising, and most of that is off-line; Zillow itself has just 1% of the total! Given its booming traffic (especially from mobile devices), it's a matter of time until more agents pay higher prices to place ads ... and in these cases, the "ads" are actually content from a user's perspective, connecting them with an agent with knowledge of a property.
Z is a very volatile stock and is somewhat hard to handle—shares sank from 44 to 31 during the market correction. But the company is growing sales and earnings at triple-digit rates, and Z has stormed back toward its old peak. I wouldn't plow in here, but a low-volume pullback toward 40 could be worth a nibble, with the real test coming August 7, when the company will report earnings.
There are a lot of uncertainties, of course, but I think this stock has big potential if the market gets going. For more information, click here.
The Tenth Revolutionary Stock
February 16, 2015
Originally from Cabot Wealth Advisory
1301 Second Avenue
Seattle, Washington 98101
|Index Membership: N/A
Industry: Business Services
Full Time Employees: 377
7/19/12 Zillow (Z): The leading online real estate website
2/16/15 The Tenth Revolutionary Stock