It’s funny how articles can differ so completely in portraying the same bit of news. As you may already know, if you read CitySignal, that is – I have been following Zillow for quite some time now. I saw their fall from grace coming a mile away but still wanted to give them the benefit of the doubt in a recent update that didn’t quite instill the confidence I’d hoped for. But my point here is, in doing research for this piece, the first article I ran across had headlines that read, “Zillow Stock Soars on Strong Results,” which was heartening, to be honest.
Strong Start for 2022
However, in contrast, the second article read, “Zillow Loses $880 Million in Failed Home-Flipping Business” – yet both pieces reported on the very same earnings call from last week.
How is that possible?
Each author came from a very different perspective, is all. How different of a picture is painted from each point of view!
Even striving for objectivity from a neutral approach, both articles contain factual information. This is, in effect, a perfect illustration of the old adage; “is the cup half full, or half-empty?”
I don’t know about you, but I’ve always been a “half full” kinda gal. Still, bearing all this in mind, yes, Zillow reported a massive loss of $880 mil during last week’s earnings call, relative to their brief segue into the iBuying industry with what was called ‘Zillow Offers.’ But considering what the company has already endured – including intense public scrutiny and complete, utter failure – I’ve decided to cut them some slack for a change. After all, everyone makes mistakes. Besides, the much bigger news is actually how well they’re doing, proving that they do indeed have an incredibly resilient foundation.
Zillow’s Zestimate
Ever since the first article, I can’t help myself with humorous “Zillow Zestimate” puns. In any case, Zillow posted revenue of $3.9 billion for their 4th quarter, up a staggering 392% from last year. Additionally, the number was well above Wall Street’s $3 billion prediction. For the entire year, revenue totaled $6 billion, a 250% increase over last year. Rich Barton, Zillow’s founder and CEO, told shareholders the wind-down of their momentary lapse of reason was progressing more smoothly and quickly than anticipated. However, there are still approximately 8,500 houses on their books, seemingly indicative of a previously understated number.
The CEO went on to throw out a couple of irresistible tidbits to investors, first talking confidently about their “rock-solid financial foundation,” then casually mentioning their “major untapped business potential.” Furthermore, last year, the company zestimated nearly one-quarter of the entire population of serious homebuyers in the United States made contact with Zillow at some point in their search. This was contrasted with just 3% of those interactions resulting in revenue. At the end of the report, investors felt reassurance desperately needed.
The news was received favorably, and coming full circle back to the original headlines of that first article, Zillow’s stock indeed soared – and has kept on soaring. Right after the call, stock prices shot up 19%, to $48.79 a share. As this article is being written, shares have increased to $63.15 and climbing – fast. In light of all these “the-cup-is-half-full” considerations, I may just have to change my Zestimation of Zillow’s future. (You did have fair warning!)
(Featured image courtesy of Zillow)
Rochelle Harris is a passionate writer originally from Phoenix, AZ. who credits her success to integrity and determination. She has a great sense of humor, loves music and her family, and writes fiction and poetry in her spare time. She is excited about the New York experience and lifestyle! Follow Rochelle on Twitter at @LinguisticAnRky or get in touch at [email protected]