Q2 2024 Summary
Published Feb 18, 2025, 5:24 PM UTCInitial Price$47.66April 1, 2024
Final Price$44.18July 1, 2024
Price Change$-3.48
% Change-7.30%
- Zillow's enhanced market strategy is showing strong results, with revenue per total transaction value growth accelerating from 50% to 80% year-over-year in their oldest enhanced markets, indicating the effectiveness of the housing super app experience and supporting rapid expansion into new markets.
- Zillow's rentals business is experiencing strong growth, with multifamily revenue up 44% year-over-year, driven by a 38% increase in multifamily properties to 44,000, and a 20% year-over-year increase in unique visitors, highlighting a significant revenue opportunity ahead.
- Zillow has strong brand recognition and customer engagement, with 80% of their audience coming directly to their platform and app usage 3 times higher than competitors, positioning them well to capture more transactions and achieve their goal of 6% transaction share.
- Macroeconomic Headwinds and Reliance on Challenging Market Segments: Zillow acknowledges that the first-time homebuyer market, which constitutes a significant portion of their customer base, is underperforming, with total purchase loan volume estimated to be down mid-single digits year-over-year in Q2 , and this trend may continue into Q3. This reliance on a struggling market segment could limit growth potential.
- Potential Impact of Regulatory Changes on Agent Commissions: Upcoming regulatory changes regarding agent commissions may negatively impact Zillow's Premier Agent business. While Zillow's executives express confidence, they also admit that commission rates are down a few basis points in 2024 versus 2023. Uncertainty around these changes could pose risks to their revenue model.
- Slower Growth in Residential Revenue Relative to the Market: In Q3 guidance, Zillow's outlook for residential revenue implies underperformance relative to the mid-single-digit growth expected in the overall housing market. This suggests that despite previous outperformance, Zillow may not sustain its growth momentum in the residential segment.