Latest news with #RichBarton
Yahoo
4 days ago
- Business
- Yahoo
Zillow (NASDAQ:ZG) Exceeds Q2 Expectations
Online real estate marketplace Zillow (NASDAQ:ZG) beat Wall Street's revenue expectations in Q2 CY2025, with sales up 14.5% year on year to $655 million. The company expects next quarter's revenue to be around $668 million, close to analysts' estimates. Its GAAP profit of $0.01 per share was in line with analysts' consensus estimates. Is now the time to buy Zillow? Find out in our full research report. Zillow (ZG) Q2 CY2025 Highlights: Revenue: $655 million vs analyst estimates of $647.2 million (14.5% year-on-year growth, 1.2% beat) EPS (GAAP): $0.01 vs analyst estimates of $0.02 (in line) Adjusted EBITDA: $155 million vs analyst estimates of $152.4 million (23.7% margin, 1.7% beat) Revenue Guidance for Q3 CY2025 is $668 million at the midpoint, roughly in line with what analysts were expecting EBITDA guidance for Q3 CY2025 is $155 million at the midpoint, below analyst estimates of $160.3 million Operating Margin: -1.7%, up from -6.6% in the same quarter last year Market Capitalization: $20.35 billion Company Overview Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ:ZG) is the leading U.S. online real estate marketplace. Revenue Growth A company's long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Zillow struggled to consistently generate demand over the last five years as its sales dropped at a 7.8% annual rate. This was below our standards and suggests it's a low quality business. Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Zillow's annualized revenue growth of 12.3% over the last two years is above its five-year trend, but we were still disappointed by the results. This quarter, Zillow reported year-on-year revenue growth of 14.5%, and its $655 million of revenue exceeded Wall Street's estimates by 1.2%. Company management is currently guiding for a 15% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 14.3% over the next 12 months, an improvement versus the last two years. This projection is above the sector average and implies its newer products and services will catalyze better top-line performance. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Operating Margin Zillow's operating margin has risen over the last 12 months, but it still averaged negative 8.4% over the last two years. This is due to its large expense base and inefficient cost structure. This quarter, Zillow generated a negative 1.7% operating margin. The company's consistent lack of profits raise a flag. Earnings Per Share Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Although Zillow's full-year earnings are still negative, it reduced its losses and improved its EPS by 34.5% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability. In Q2, Zillow reported EPS at $0.01, up from negative $0.07 in the same quarter last year. Despite growing year on year, this print missed analysts' estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast Zillow's full-year EPS of negative $0.24 will reach break even. Key Takeaways from Zillow's Q2 Results It was good to see Zillow narrowly top analysts' revenue and EBITDA expectations this quarter. On the other hand, its EBITDA guidance for next quarter fell short of Wall Street's estimates. Overall, this was a weaker quarter. The stock remained flat at $81.98 immediately after reporting. Should you buy the stock or not? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.
Geek Wire
14-07-2025
- Business
- Geek Wire
Seattle startup legends Rich Barton, Court Lorenzini on the inspiration behind Zillow and Docusign
GeekWire's startup coverage documents the Pacific Northwest entrepreneurial scene. Sign up for our weekly startup newsletter , and check out the GeekWire funding tracker and venture capital directory . Rich Barton and Court Lorenzini spoke last week at a Founder Nexus event on Microsoft's campus, sharing entrepreneurial lessons with budding Seattle-area startup leaders. It was a homecoming of sorts for Barton, who began his career at Microsoft in 1991 and led a project that eventually spun out as Expedia. Barton said the inspiration for Expedia came from his frustration with Microsoft's internal travel booking agency. 'I knew I could do better if I had access to the system,' he said. He recognized an opportunity to use burgeoning online services to help connect consumers with travel booking information. After spinning out Expedia from Microsoft and taking the company public in 1999, Barton started another company — also born from a personal frustration. 'I was shopping for a home, and there was crap available on the web, in this giant vertical of real estate,' Barton said. Zillow launched in 2004 and became a digital real estate juggernaut, going public in 2011. Lorenzini's startup spark came under different circumstances. He helped launch Docusign in 2003 after acquiring a digital signature patent and brand from the remnants of a failed company. 'We took that idea and ran with it,' Lorenzini said. Barton noted that Lorenzini 'recognized the pearl in the ocean.' Zillow and Docusign are two of Seattle's biggest startup successes, with a current combined market capitalization of more than $40 billion. The conversation revealed different philosophies about early-stage company building, from customer acquisition to revenue models to leadership style. Barton, who also co-founded job review site Glassdoor, built his career on freemium models that accumulate massive consumer audiences before monetizing. 'Once the consumer audience has accumulated, the people in the existing industry who want to sell stuff in the marketplace bang down your door,' he said. 'They may not like you because you're disrupting, but what they do like is the fact that you have lots of customers.' Lorenzini took the opposite approach. 'I was very adamant about never giving anything away for free,' Lorenzini said. 'Consumers in that era — early 2000s — were being trained on freemium, which was really annoying to me, and I still find it incredibly annoying. I don't like that strategy.' Barton quipped: 'It's the only strategy I know, Court.' Lorenzini said Docusign focused entirely on business customers who could pay from day one. 'The only reason it thrived is because we focused on people that could pay us and eventually earned the right to be a consumer brand,' he explained. The veteran founders also discussed early resource allocation, particularly around sales and marketing. Lorenzini advocated for direct sales until achieving product-market fit: 'Until you get strong signal, only then do you start investing in sales, and after you've got sales, go into marketing,' he said. He said companies fail by scaling prematurely: 'Companies die on the hill of overspending: building a sales team and a marketing engine, long before they've actually got true pull.' Barton agreed on avoiding early advertising spend and encouraged building provocative features that generate organic word-of-mouth. 'I always wanted to have a feature that provoked people, such that word of mouth carried naturally, and I didn't have to spend big money on advertising dollars,' he said. 'The most important part of the marketing mix is the product.' On building culture, Lorenzini was 'very intentional' and viewed it as 'a strategic differentiator' that helped with hiring efforts. 'It still helps us attract and retain great talent,' he said. Barton took a more intuitive approach, but he was equally committed to certain principles, particularly after learning from Microsoft's harsh early culture. 'When I spun Expedia out, I deliberately set a culture of mutual respect,' he said, adding: 'The wheel of our business does not turn unless all the spokes in the wheel are evenly distributed and tightened to the same tension.' Lorenzini, who left Docusign in 2008, launched Founder Nexus last year as a community for startup leaders. He's a limited partner in Seattle firms including Graham & Walker, Ascend, and Unlock Venture Partners. Barton returned to Zillow in 2019 as CEO, and left his day-to-day work last year. He remains executive chair and is also a longtime board member at Netflix.
Yahoo
07-07-2025
- Business
- Yahoo
1 Mid-Cap Stock on Our Buy List and 2 to Avoid
Mid-cap stocks often strike the right balance between having proven business models and market opportunities that can support $100 billion corporations. However, they face intense competition from scaled industry giants and can be disrupted by new innovative players vying for a slice of the pie. Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here is one mid-cap stock with a long growth runway and two that could be down big. Market Cap: $17.38 billion Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ:ZG) is the leading U.S. online real estate marketplace. Why Do We Pass on ZG? Products and services aren't resonating with the market as its revenue declined by 7.6% annually over the last five years Poor expense management has led to operating margin losses Waning returns on capital from an already weak starting point displays the inefficacy of management's past and current investment decisions Zillow is trading at $69.85 per share, or 37.3x forward P/E. To fully understand why you should be careful with ZG, check out our full research report (it's free). Market Cap: $14.44 billion As a pioneer in 3D mammography technology that has revolutionized breast cancer detection, Hologic (NASDAQ:HOLX) develops and manufactures diagnostic products, medical imaging systems, and surgical devices focused primarily on women's health and wellness. Why Are We Wary of HOLX? Constant currency revenue growth has disappointed over the past two years and shows demand was soft Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 23.2 percentage points Shrinking returns on capital suggest that increasing competition is eating into the company's profitability At $65.08 per share, Hologic trades at 14.6x forward P/E. Dive into our free research report to see why there are better opportunities than HOLX. Market Cap: $11.1 billion Founded in 2009 during the aftermath of the financial crisis when many insurers were retreating from riskier markets, Kinsale Capital Group (NYSE:KNSL) is an insurance company that specializes in writing policies for hard-to-place, unusual, or high-risk businesses that standard insurers typically avoid. Why Is KNSL a Good Business? Impressive 28.4% annual net premiums earned growth over the last two years indicates it's winning market share this cycle Incremental sales significantly boosted profitability as its annual earnings per share growth of 37.6% over the last two years outstripped its revenue performance Annual book value per share growth of 38.8% over the last two years was superb and indicates its capital strength increased during this cycle Kinsale Capital Group's stock price of $476.16 implies a valuation ratio of 5.9x forward P/B. Is now a good time to buy? Find out in our full research report, it's free. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
Geek Wire
07-06-2025
- Business
- Geek Wire
Zillow co-founder Rich Barton on the ‘provocation marketing playbook' that can boost your brand
GeekWire's startup coverage documents the Pacific Northwest entrepreneurial scene. Sign up for our weekly startup newsletter , and check out the GeekWire funding tracker and venture capital directory . Rich Barton. (Zillow Photo) Here's a marketing tip for companies on a tight budget: be provocative. That's the strategy Zillow used in its early days in Seattle, according to Rich Barton, the company's co-founder who joined the Tim Ferriss Show on a recent podcast. Barton previously co-founded Expedia, which spent heavily on marketing to drum up interest in the travel company's brand. But early Zillow investor Bill Gurley challenged the burgeoning Seattle startup to imagine if it didn't have any marketing budget. 'We were like, 'No way, you can't do that,'' Barton recalled. 'But that made us think a lot more creatively about the features that we built, the way we built them, and then the way we PR communicated them.' Zillow recognized that the data it was collecting on housing prices was valuable for newspapers and built a mechanism to 'constantly feed the endless appetite,' Barton noted. That was a big brand builder — with no ad money spent. 'When you have constantly changing data that people are interested in, you can almost think about feeding that data to hungry consumers in a Bloomberg-like way,' he said. The company then launched its now-famous 'Zestimate' home estimate tool in 2006 — which drew more than 1 million visitors within the first three days and crashed the site. 'When you have a really provocative feature that you know people are going to feel emotional about one way or the other and they're going to talk about it, you're on to something,' Barton said. Since then Barton said he has developed a playbook around what he calls 'provocation marketing.' 'I'm a big believer in the product being the most important part of the marketing mix, if that makes sense to you,' Barton said. Barton, who stepped down as Zillow's CEO last year, also pointed to Glassdoor, the review and salary database site he co-founded. 'We knew salaries [were] a little bit taboo for a lot of people — so it was inherently secret and provocative,' he said. Companies can do too much that may offend or turn off consumers — so there's a balance. You don't want to scare people or piss them off. 'If you're building a brand and a service, you want people to be provoked — but feel good, or tickled, or entertained,' Barton said. He added: 'Provocation marketing with a heart, with the end consumer's best interests in mind — that's a winner.' Barton and Ferris covered a number of other topics during their conversation, including the early days at Expedia, advice on hiring and firing, balancing family and professional life, and other leadership tips.
Yahoo
08-05-2025
- Business
- Yahoo
Zillow's (NASDAQ:ZG) Q1: Beats On Revenue But Stock Drops
Online real estate marketplace Zillow (NASDAQ:ZG) reported Q1 CY2025 results topping the market's revenue expectations , with sales up 13% year on year to $598 million. Its GAAP profit of $0.03 per share was significantly above analysts' consensus estimates. Is now the time to buy Zillow? Find out in our full research report. Zillow (ZG) Q1 CY2025 Highlights: Revenue: $598 million vs analyst estimates of $589.9 million (13% year-on-year growth, 1.4% beat) EPS (GAAP): $0.03 vs analyst estimates of -$0.02 (significant beat) Adjusted EBITDA: $153 million vs analyst estimates of $138.5 million (25.6% margin, 10.5% beat) Operating Margin: -1.5%, up from -8.5% in the same quarter last year Free Cash Flow Margin: 11.4%, up from 7.8% in the same quarter last year Market Capitalization: $16.15 billion Company Overview Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ:ZG) is the leading U.S. online real estate marketplace. Sales Growth A company's long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Zillow's demand was weak and its revenue declined by 7.6% per year. This was below our standards and suggests it's a lower quality business. Zillow Quarterly Revenue We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Zillow's annualized revenue growth of 10.4% over the last two years is above its five-year trend, but we were still disappointed by the results. Zillow Year-On-Year Revenue Growth This quarter, Zillow reported year-on-year revenue growth of 13%, and its $598 million of revenue exceeded Wall Street's estimates by 1.4%. Looking ahead, sell-side analysts expect revenue to grow 14.4% over the next 12 months, an improvement versus the last two years. This projection is above average for the sector and suggests its newer products and services will spur better top-line performance. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Operating Margin Zillow's operating margin has been trending up over the last 12 months, but it still averaged negative 10% over the last two years. This is due to its large expense base and inefficient cost structure.
