Investment advice on real-estate website Infographic

NO THANKS ZILLOW MISCONCEPTIONS BEHIND THE ZILLOW INVESTMENT THESIS Zillow has clambered to dizzying heights to become a Wall Street darling. Scores of investment firms keep recommending its stock as a must buy. But wait. Is purchasing Zillow stock, especially for the long term, such a great idea? NO..WHY? High stock prices restrict any potential investment upside Safer and steady stocks will outperform Zillow in the long term Zillow spends more than 50 percent of its revenues on sales and marketing Shaky relationships with real estate agents, its largest customer base Much of Zillow's listings data is outdated and unreliable More competition means Zillow isn't the only guy in town to meet needs ZILLOW COULD BE A WISE BUY ONLY FOR. Short-term speculators eager to make money in the next few quarters. Even then it is a risk because Zillow could easily fall hard and fast. For example, when competitor Trulia reported substandard quar- terly results in February 2014, its stock plunged. Zil- low's did as well-for no apparent reason other than guilt by association. WAIT? If Zillow stock drops to about $75, it may make a better long-term investment. 5 YEAR 5 YEAR FAIR DISCOUNT PROJECTED 5 YEAR EPS PROJECTED RATIO PRICE TARGET YEAR RETURNS VALUE 61.512670 2014 0.06 50 94.668 2.4% 5653022 10 YEAR PROJECTED PE 10 YEAR PROJECTED 1o 2020 3.1941 PRICE TARGET FAIR VALU DISCOUNT YEAR RETURNS 2021 74.106038 4.15233 25 175.43594 -0.13291053 1.1164948 25 0299307 838888I 3492224 10.105110 15 YEAR 2025 FAIR VALUE DISCOUNT PROJECTED 15 PROJECTED PE TARGET YEAR RETURNS 2026 12.1261323 218.27038 -0.40111921 12.5 1.1027123 456 22208 211564 8300527 3572189 2029 20.08OR7 51643136 20 YEAR PROJECTED PE 20 YEAR PRICE TARGET FAIR VALUE DISCOUNT PROJECTED 2o YEAR RETURNS 23.09100 64389606 151.21576 1678543 2030 10 -0.3397642 1.0741757 861859 68590581 4177702 23.09300 2034 25 YEAR PRICE TARGET FAIR VALUE PROJECTED 2s 64389606 PROJECTED PE DISCOUNT YEAR RETURNS 2035 42.497107 1631037 0.06 424.22737 -0.7066174 49.196730 1435223 1.0669428 5121906 2255682 87687948 Source: Seeking Alpha, "Zillow: Terrific Short-Term Trade, Terrible Long-Term Investment," March 2014 MISMANAGED SPENDING Zillow spends more than 50 percent of its revenues on sales and marketing. Even in the first quarter of 2014, the company again posted a loss because of all the money it is spending on sales and marketing. When will it post a true profit? Here's a sobering figure: Zillow spent so heavily on advertising in 2013 that it lost $12.5 million overall. Source: Seeking Alpha, "Zillow: Terrific Short-Term Trade, Terrible Long-Term Investment," March 2014 UNRELIABLE LISTINGS DATA Zillow acknowledges on its website that many of its Zestimates and home listings are inaccurate. By comparison, listings on Realtor.com are updated every 15 minutes. Zillow's lag of several weeks between data updates means a property can: K GO INTO ESCROW K BE SOLD K BE TAKEN OFF THE MARKET K HAD A PRICE CHANGE PRINTING. .. 0נ 11ו 11 000נם 100311 1001l 0101 01011 11101 10101 000111 11111 0101 00011 OD101 010110 10000 0103 L10000 10011 1103 11013 11101 e1 01001ננ10ב 11001 10103 11001 10301 111110 11001 0001 01001 10001 Listings data on local realtor and MLS sites are directly uploaded by agents and are 100 percent accurate. Zillow's house valuation estimates are volatile. Many people report their house estimates have jumped for no apparent reason and then decreased significantly within days-also for no apparent reason. ZILLOW WON'T BITE THE HAND THAT FEEDS IT (REAL ESTATE AGENTS) Short-term speculators eager to make money in the next few quarters. Even then it is a risk because Zillow could easily fall hard and fast. For example, when competitor Trulia reported substandard quarterly results in February 2014, its stock plunged. Zillow's did as well-for no apparent reason other than guilt by association. Source: Seeking Alpha, "Zillow: Terrific Short-Term Trade, Terrible Long-Term Investment," March 2014 REAL ESTATE AGENTS WILL REALIZE SOONER RATHER THAN LATER THEY DON'T NEED ZILLOW Real estate groups that stopped listing with Zillow continue to prosper, often even more Realty Austin stopped listing with Zillow, and their listings sold FASTER than any top real-estate group in Austin. Exposure on sites such as Zillow and Trulia is unnecessary for real estate agencies. More brokers will stop listing with Zillow and return to what worked for them so suc- cessfully in the past. Source: Seeking Alpha, "Zillow: Terrific Short-Term Trade, Terrible Long-Term Investment," March 2014 COMPETITION 2 Zillow.com. Zillow has Trulia and other start-ups to contend with O Real estate agents must be stingier with how they spend their marketing dollars and don't want to be pulled in many directions Given Zillow's inaccurate data sets and its sheer unnecessariness to make a sale, agents are more likely to return to their roots.