Zillow Group (ZG), mcap=$7bn, price $29.33 vs $36.00

$ZG pitch:
– A front door to US residential real estate with 2/3 of home buyers using Zillow.
– Currently under-monetizes its powerful position.
– A recently introduced Flex pricing model will drive improved monetization by aligning Zillow’s and agents’ incentives better.
– Inroads into new products such as mortgage origination or closing services are expected to have a material impact down the road.
– Wind-down of the iBuying will free up capital on the balance sheet, leaving the company with meaningful net cash.

$ZG valuation: Trades at 12x consensus 2022 EBITDA.

Exp. gain: Not specified.

Full ZG write-up (free guest account required):

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