Zillow: Setting Up Success With A Business Model Transition

Gary Alexander 34.31K Followers Follow Summary Zillow has shifted its focus in its For Sale business to a Preferred Agent model, where agents pay Zillow upon successful transaction closing. Zillow's expected revenue deceleration this year is largely due to deferring revenue to home sales, rather than upfront. The new model allows for >30% greater monetization per connection made on Zillow. Z stock trades at a compelling ~10x adjusted EBITDA multiple, which is a discount driven by the market's lack of familiarity with the new business model. Crovik Media/iStock via Getty Images The stock market is sitting at fresh all-time highs, but rather than use the good tidings as an excuse to become complacent, I think now is the perfect time to be a keen stock-picker. In my view, the stock This article was written by Gary Alexander 34.31K Followers Follow With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood. Analyst’s Disclosure: I/we have a beneficial long position in the shares of Z either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.