Does Success of Zillow and Trulia Indicate Housing Recovery?

Michael Teague |

Does Success of Zillow and Trulia Indicate Housing Recovery?Zillow (Z) and Trulia (TRLA), two online real-estate databases, both enjoyed big days on the market after posting better-than-expected fourth-quarter earnings reports. Nearing the close, Zillow’s share price is up 9.21 percent to $42.56, while Trulia has made a more modest but still-impressive gain of 4.79 percent to $30.39, which comes on the heals of yesterday's 88-percent spike, begging the question of whether or not this is another indication that the housing market is in recovery.

Zillow’s revenue in Q4 underwent an increase of 73 percent, or $34.3 million, compared to $19.9 million during the same period of 2011. Net income fell to 2 cents per share versus the 3 cents per share from the year before.  This mirrored a drastic 47 percent increase to 34.5 million average monthly unique visitors, half of which, by December, were mobile visitors. Furthermore, the company spent a great deal on the sort of acquisitions and expansion that put it at the top of its field: it entered the home improvement market to join its existing presence in the real-estate, mortgage, and rental marketplaces, as well as making acquisitions that will supplement its ability to operate in these markets.

Trulia, for its part, had a Q4 revenue of $20.6 million, a 75-percent increase over the prior year, as its monthly unique visitors was up 50 percent to 23.6 million. The company narrowed losses to 6 cents per share versus the 30 cents per share from a year ago. Additionally, the average monthly revenue per subscriber for the quarter was up 46 percent to $172 over Q4 of 2011. The company also launched a Trulia app for windows 8 and unveiled the Trulia Mortgage Center to supplement its operations.

Along with Realogy Holdings Corp (RLGY), who owns the Coldwell Banker and Century 21 brokerages, Trulia and Zillow are putting up results that many would wish to see as the result of rising real estate demand on the part of consumers. Both companies show no signs of slowing down more than a month into 2013, as both are reinvesting into their operations in the hopes of taking advantage of an ostensibly improving unemployment situation, as well as incredibly low interest rates and an 88 percent increase in single-home prices.

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Companies

Symbol Name Price Change % Volume
ANAC Anacor Pharmaceuticals Inc. n/a n/a n/a 0
RLGY Realogy Holdings Corp. 23.93 -0.01 -0.04 1,617,834
Z Zillow Group Inc. 33.87 0.02 0.06 774,759

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