Q4 2023 Summary
Published Feb 18, 2025, 5:23 PM UTCInitial Price$44.67October 1, 2023
Final Price$56.72December 31, 2023
Price Change$12.05
% Change+26.98%
- Zillow expects double-digit revenue growth in 2024 despite anticipating a relatively flat housing market. The company has consistently outperformed the industry, with six consecutive quarters of outperformance in its residential segment. In Q4, total revenue grew 9% year-over-year, outperforming the industry by 700 basis points. Zillow plans to continue this trend through its growth pillars and expansion of enhanced markets from 9 to 40 by the end of 2024.
- The Rentals segment is experiencing strong growth, with revenue increasing 37% year-over-year in Q4, driven by multifamily revenue growth of 52%. Zillow has the largest audience of renters and the most listings in the market. The company expects rentals revenue to continue growing over 30% year-over-year in Q1 2024, supported by strong execution and a favorable industry backdrop.
- Zillow is investing in growth initiatives such as real-time touring, Listing Showcase, and Zillow Home Loans, which are expected to drive transaction conversion and revenue growth. The expansion of enhanced markets is projected to cover 20% of total Zillow connections by the end of 2024. These efforts are anticipated to result in market share gains and accelerated revenue growth throughout 2024.
- Execution risks associated with aggressive expansion plans: Zillow plans to expand its enhanced markets from 9 to 40 by the end of 2024, aiming to cover 20% of all connections. Such rapid expansion may pose operational challenges, and if the company fails to successfully implement its services in new markets, it could negatively impact growth projections.
- Rising variable costs may pressure margins: The company acknowledges that variable expenses are expected to increase due to staffing up sales ahead of growth in areas like rentals, Listing Showcase, and Zillow Home Loans. This increase in costs before achieving operating leverage could impact profitability in the near term.
- Reliance on ambitious growth targets in a flat housing market: Despite anticipating a relatively flat housing market in 2024, Zillow expects to achieve double-digit revenue growth. Achieving such growth in a stagnant market relies heavily on the success of new initiatives and expansions, which may be challenging and carries significant risk if market conditions do not improve.