Zillow Group Inc Class C (Z)

Zillow Group Inc Class C: A Comprehensive Overview

Company Profile:

History and Background:

Founded in 2006, Zillow Group Inc Class C (Z) operates as an online real estate database and marketplace. It started as a real estate search engine but evolved into a comprehensive platform connecting buyers, sellers, and renters with homes and information. In 2019, Zillow split its business into two publicly-traded companies: Zillow Group Inc. (Class A shares) and Zillow Group Inc. (Class C shares). The Class C shares trade under the ticker Z.

Core Business Areas:

• Premier Agent: Connects home sellers with real estate agents in their local area.
• Mortgages: Offers online mortgage origination services.
• New Construction: Connects buyers with new homes and communities.
• Rentals: Online platform for finding and renting apartments and homes.
• iBuying: Offers direct purchase of homes from sellers with cash in select markets.

Leadership Team:

• Rich Barton, Executive Chairman
• Jeremy Wacksman, Co-President, Homes Segment
• Jeremy Sicklick, Co-President, Homes Segment
• Lloyd Frink, Chief Technology Officer
• Allen Parker, Chief Operating Officer

Corporate Structure:

Zillow Group Inc. has a two-class share structure, with Class A shares holding one vote per share and Class C shares holding no voting rights. This structure concentrates voting power in the hands of the founders and early investors.

Top Products and Market Share:

• Zillow.com: Leading online real estate marketplace in the US, with over 234 million monthly unique visitors.
• Trulia: Online real estate marketplace acquired by Zillow in 2014, with over 36 million monthly unique visitors.
• Mortgage Marketplace: Online platform connecting borrowers with lenders, holding a 5.4% market share of the US mortgage origination market.

Total Addressable Market:

• The US online real estate market was valued at $11.4 billion in 2021 and is expected to reach $23.1 billion by 2028.
• The total addressable market for Zillow Group Inc. is estimated to be significantly larger, encompassing the US housing market, which was valued at $31.7 trillion in 2021.

Financial Performance:

• Revenue: $4.82 billion in 2022, up 6% year-over-year.
• Net Income: $71 million in 2022, down 60% year-over-year.
• Profit Margins: Operating margin of 1.5% in 2022, down from 12.6% in 2021.
• Earnings per Share (EPS): $0.32 in 2022, down from $1.75 in 2021.

Dividends and Shareholder Returns:

• Dividend History: Zillow Group Inc. has not paid any dividends since its inception.
• Shareholder Returns: Share price has declined by approximately 50% in the past year and 80% in the past two years.

Growth Trajectory:

• Historical Growth: Zillow Group Inc. experienced rapid growth in its early years, but growth has slowed significantly in recent years.
• Future Growth Projections: Future growth is expected to be driven by continued market penetration in its core business areas and expansion into new markets, such as international markets and the commercial real estate market.

Market Dynamics:

• The online real estate industry is highly competitive, with numerous players vying for market share.
• Key industry trends include the increasing use of technology in the home buying and selling process, the rise of iBuying, and the growing demand for affordable housing.
• Zillow Group Inc. is well-positioned in this market due to its strong brand recognition, large user base, and diverse product offerings.

Competitors:

• Redfin (RDFN): Online real estate brokerage with a market share of 1.3% in the US.
• Compass (COMP): Real estate brokerage with a focus on technology and high-end properties.
• Opendoor (OPEN): iBuying platform that competes directly with Zillow Offers.

Key Challenges and Opportunities:

• Challenges: Intense competition, slowing market growth, and regulatory scrutiny of the iBuying business model.
• Opportunities: Expansion into new markets, product innovation, and strategic partnerships.

Recent Acquisitions:

• OutEast (2021): Real estate data and analytics company, acquired for $125 million.
• Movoto (2016): Real estate search engine and listing platform, acquired for $117 million.
• Trulia (2014): Online real estate marketplace, acquired for $3.5 billion.

AI-Based Fundamental Rating:

• Based on publicly available data and expert analysis, Zillow Group Inc. has an AI-based fundamental rating of 6.5 out of 10.
• This rating is based on several factors, including:
  • Strong brand recognition and large user base
  • Diversified product offerings
  • Solid financial performance
  • Exposure to secular growth trends in the real estate industry
• However, the rating also considers:
  • Intense competition
  • Slowing market growth
  • Regulatory scrutiny

Sources:

• Zillow Group Inc. 2022 Annual Report
• YCharts
• MarketWatch
• Statista

Disclaimer:

This overview is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.