The real estate landscape is changing rapidly, and brokerages are finding new ways to push the industry and reach new customers. In this clip from "The Rank" on Motley Fool Live, recorded on May 23, Motley Fool contributor Zane Fracek explains the key pillars of his bullish thesis for real estate company Zillow Group (ZG 3.85%) (Z 4.44%).
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Zane Fracek: The things that keep me interested in Zillow are, it's trading at such a low valuation you can scoop up shares for 0.9 times sales. Historically, they've been able to grow 57% a year on average through good times and bad, now I think we're going to see obviously some rough times, the pandemic was difficult as well, but I think there's still a huge tailwind for them, they beat on the top and bottom line, I think they can add a lot of convenience as well.
I think especially for the younger generation, they are going to be more incentivized to go with something like Zillow rather than a traditional real estate agent, and then I'm pretty bullish on their advertising the original business model, bringing people onto the site, and selling those ad placements. I think advertising is something that's not really going to slow down too much for them as long as they can continue to be a premier site, as long as their Zestimate is still accurate, which there were some worries about bringing people onto the site, and keeping the ad placement prices high for them. But that's pretty much how they are doing now, I ranked them high because I think long term, it's a good place to be. It's somewhere I would rather be than I guess a traditional REIT not to say that there aren't good REIT, but I think it being a more of a tech play fits with how I invest.
