Impact of Settlement on Zillow's Business Model

SOURCE www.cnn.com
Zillow faces challenges after a settlement that could impact real estate agents' commissions, potentially leading to revenue drops and changes in business model. Analysts have mixed views on the company's future.

Key Points

  • Zillow faces challenges due to a settlement impacting real estate agents' commissions.
  • Revenue drops may occur if agents have less to spend on Zillow's services.
  • Analysts have mixed views on Zillow's future, with differing price targets and recommendations.

Pros

  • Zillow has a vast amount of data on US homes and has outperformed the real estate industry average in revenue.
  • The company has been investing in other revenue streams like rental market, home loans, and real estate software.

Cons

  • The settlement could lead to significant revenue drops for Zillow if real estate agents have less to spend on lead generation and other services.
  • Analysts have differing opinions on Zillow's future, with some predicting a downside risk of 40% to 60%.