ZillowZillow is a mobile app and website for the sale or purchase of a home, financing, renting in the United States.
For Zillow, the pandemic and mortgages close to zero interest rates have spurred the company's revenue growth. Secondary home sales in 2020 were the highest since 2006.
On February 10, Zillow posted earnings for the 4th quarter and full 2020. According to the report, revenue for the year grew by 22%, but in the 4th quarter it decreased by as much as 16%, despite strong revenue growth in its mortgage segment in the 4th quarter. The fact that revenue will not grow in 2021 is becoming more and more obvious.
Mortgage rates are at an all-time low, but lending standards are the strictest in the US in decades, limiting the number of buyers. Fannie Mae forecasts for 2021 sales and house prices are not encouraging.
The current level of share price is too high given that short-term revenues in Q4 actually fell by 16%, and Zillow ad revenues will stop growing this year, profit growth will depend only on cost control, but keeping the growth by reducing costs will not convincing to investors.
