ZG：伯恩斯坦SDC的要点速览

Nikhil Devnani, CFA+1 917 344 8425nikhil.devnani@bernsteinsg.comNathan Gee+1 917 344 8573nathan.gee@bernsteinsg.com ZG — Thursday, May 29that 1:30PM ET Presenter: CEO Jeremy Wacksman Overall takeaway: Despite the sluggish housing market, Zillow continues to execute against its strategic effort of building a more comprehensive online homeshopping and rental experience. The company sees opportunity to continue taking market share given the quality of Premier Agents, trafficand data it can leverage, and the growing suite of consumer services and agent-facing tools it’s now providing. The company is controllingwhat it can, and expects to grow revenue at a low-to-mid teens pace in 2025 as these product efforts come to life. Staying disciplined on theexpenses, particularly fixed costs, should drive margin leverage on an adjusted EBITDA and GAAP basis. Highlights: 1.Enhanced Markets are progressing.Zillow’s Enhanced Market strategy is at the heart of its housing ecosystem vision, with coverageexpected to grow to 35% of connections by year-end. These markets encompass greater integration between the Residential andMortgage businesses, but it takes time to build the human-to-human interaction (primary constraint on the pace at which Zillow can rollout these enhancements). In terms of future opportunities, title/escrow and insurance products are still to come. Management seesZillow Home Loans as attractive on a standalone basis, with some incremental benefits of leveraging existing traffic and CAC, and drivingadditional revenue/wallet share capture. Financing signals also help filter for intent from the buyer standpoint. 2.Year of Rentals:With no national database of listings, Rentals is a healthy two-sided marketplace. Zillow’s ability to aggregate uniqueinventory gives it a competitive advantage. Having captured much of the long tail of rental properties, multifamily listings are expected tobe the biggest lever for incremental revenue growth in Rentals as it eyes the $1B revenue target in this segment. 3.Industry changes don’t appear to have changed too much:While it’s probably still too early to know for sure how things willland (in our view), the messaging around commission rates for Premier Agents was encouraging. The company hasn’t seen signs ofbroad-based fee compression, with the higher quality agents viewing NAR changes as an opportunity to exhibit and capture value. OnClear Cooperation, Mr. Wacksman noted the support it has received behind its recently-published listing access standards wherein itadvocates for broad visibility of listings in a bid for market transparency. We don’t view this as a major issue for Zillow. 4.AI agents, real estate agents:We debated the risks and opportunities from increasingly AI-driven search. Management feels that thedegree of complexity/regulation, localized nature of the housing ecosystem, and the challenges with ultimately closing a transaction giveZillow a valuable role to play even in an AI agent world. Zillow also sees opportunity for GenAI to eliminate certain waste and automatemanual tasks in the agent and loan officer workflow, as well as in engineering productivity at the corporate level. BERNSTEIN TICKER TABLE I. REQUIRED DISCLOSURES References to "Bernstein" or the “Firm” in these disclosures relate to the following entities: Bernstein Institutional Services LLC(April 1, 2024 onwards), Sanford C. Bernstein & Co., LLC (pre April 1, 2024), Bernstein Autonomous LLP, BSG France S.A. (April 1,2024 onwards), Sanford C. Bernstein (Hong Kong) Limited盛博香港有限公司,Sanford C. Bernstein (Canada) Limited, SanfordC. Bernstein (India) Private Limited (SEBI registration no. INH000006378), Sanford C. Bernstein (Singapore) Private Limited andSanford C. Bernstein Japan KK(サンフォード・C・バーンスタイン株式会社). On April 1, 2024, Société Générale (SG) and AllianceBernstein, L.P. (AB) completed a transaction that created a new joint venturein which their respective cash equities and research businesses operate in a new business combination. Although their respectiveownership percentages in the joint venture differ between North America and the rest of the world, the creation, production andpublication of research is handled collaboratively on a global basis across the two research brands, “Bernstein” and “Autonomous”.Unless specifically noted otherwise, for purposes of these disclosures, references to Bernstein’s “affiliates” relate to both SG andAB and their respective affiliates. VALUATION METHODOLOGY Zillow Group Inc We value Zillow using a 50/50 combination of 2026E EV/EBITDA multiple of 25x and a DCF using a WACC of 11% and a terminalgrowth rate of 3%. Our Price Target of $65 is set on a fully diluted basis. We treat SBC as a cash expense for the purposes ofDCF. We view Zillow as a digital advertising/media platform and benchmark valuation to comparable peers in this industry set,as well as history. RISKS Zillow Group Inc Upside Risks •Housing market recovers faster than we antici