Zillow (NASDAQ:Z), the operator of real estate portal, Zillow.com closed the last session of trading at $96.45, an upside of 0.87% over its previous close. The Friday close was an all-time high the stock has seen, coming on a day when the bears came calling on the street. The story of the Zillow stock price over the last one year has been impressive. The stock has gained 252% in the year-to-date against NASDAQ gains of 21%. So what is it that is fueling such gains? We think it is the overall sentiment in the US real-estate market, which has only been improving as the year has gone by. The prevailing positivity among investors has fueled growth across the sector with stocks of Move Inc. as well as Trulia registering 3-figure gains in the current year. However, an investor looking for value in the long term would do well to avoid these stocks at their current levels.
We at Amigobulls believe that a good and safe stock should have a potential for growth accompanied by stable and healthy cash flows, even if it is not profitable in the short run. However a quick look at the financials of Zillow suggests that the revenue is growing, but the net income has seen a negative growth over the last few quarters, and the fact that the stock is currently at all-time highs makes the stock significantly risky. Zillow, with no consistent profits and variable cash flows, is one stock which has outperformed on the back of weak fundamentals and that isn’t a trend we at Amigobulls look forward to when looking for stocks to put our money into. Therefore while the stock may continue to see significant gains in the short term, this is one stock which won’t make it to our top internet stock picks.
To see Zillow’s latest stock price movement, check Zillow stock chart.
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