Zillow’s third quarter results were shaped by robust growth in both its For Sale and Rentals segments, which management linked to continued digital product innovation and strong customer adoption. CEO Jeremy Wacksman cited the success of features like virtual staging in Zillow Showcase and the expansion of the Rentals marketplace, particularly multifamily listings, as key contributors to revenue growth. Management also emphasized that disciplined cost management and effective integration of software tools for agents and property managers helped drive margin expansion and positive net income.

Is now the time to buy ZG? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Zillow’s Q3 Earnings Call

• Ronald Josey (Citi) asked about the risks and opportunities of Zillow’s AI integration and ChatGPT partnership. CEO Jeremy Wacksman described the move as additive, emphasizing incremental customer engagement and brand strength.
• Daniel Kurnos (Benchmark) questioned the impact of regulatory scrutiny on syndication agreements. Wacksman stated the Redfin partnership benefits both consumers and property managers, and management sees no business disruption from pending FTC actions.
• Bradley Erickson (RBC) sought details on drivers behind For Sale outperformance and the monetization strategy for Zillow Pro. CFO Jeremy Hofmann pointed to enhanced market adoption and mortgage growth, while Wacksman highlighted Zillow Pro’s bundled agent software approach.
• Nikhil Devnani (Bernstein) probed the long-term impact of Zillow Preferred on market share and Rentals sales strategy. Hofmann explained that enhanced market and Preferred expansion should widen Zillow’s lead, with Rentals growth strategies unchanged despite legal scrutiny.
• Dae Lee (JPMorgan) asked about differences in consumer journeys via ChatGPT versus direct channels. Wacksman noted it is too early to quantify, but expects integrated experiences to deepen user engagement and drive transactions.

Catalysts in Upcoming Quarters

In the coming quarters, our team will monitor (1) the pace of Rentals inventory and revenue growth, especially in multifamily, (2) early adoption and feedback from agents using Zillow Pro, and (3) the impact of AI-driven product features on user engagement and transaction rates. Additionally, we will assess how regulatory developments and syndication partnerships influence Zillow’s ability to expand its listings ecosystem.

Zillow currently trades at $70.13, up from $68.79 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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