Should you buy Zillow stock? (December 2023)

See more of my work at https://www.3minutebreakdowns.com Zillow stock analysis. Ticker: $Z $ZG Zillow stock gained 23% last week but nothing about the business really changed. The company didn’t issue any press releases or make any new filings with the SEC. Rather, what happened was that the Federal Reserve indicated it would make 3 interest rate cuts next year. Those rate cuts will bring mortgage rates down which should help home sales and that should help Zillow which is now the most visited real estate website in the U.S. The rally in the stock means that Zillow now has a market cap of 13.5 billion dollars. Account for cash, investments and debt and the enterprise value is just under 12 billion. But at 6 times revenue and 54 times free cash flow, some caution seems warranted. After all, 30-year mortgage rates still sit around 7 and a half percent. Dropping that figure to something like 6 and a half percent still leaves millions of homeowners holding mortgages at 3% or less. Those homeowners don’t want to move because they don’t want to give up low-rate mortgages and so there remains a clear lack of supply in the marketplace. In fact, existing home sales are near their lowest levels since the 2008 financial crisis. #investing #stockstobuy #stockmarket