Zillow Inc (Z), Trulia Inc (TRLA): Chinese Elixir Potent for U.S. Home Market

What the top and bottom lines say

These acquisitions should provide better results for Zillow Inc (NASDAQ:Z), which posted a record $34.3 million in revenue for 4Q12, up 73% from a year earlier. Net income for the recent quarter amounted to $0.5 million, or $0.02 in basic diluted EPS, exceeding the consensus estimate of a $0.6 loss.

Trulia Inc (NYSE:TRLA), in its latest quarterly report, had $20.6 million in revenue, which was up 76.1% year-over-year, beating its 60% growth guidance. However, the company posted a net loss of $1.59 million for the period. Like Zillow Inc (NASDAQ:Z) it hopes to further grow its top line and reverse its loss through mobile apps and by broadening its platforms.

Realogy is an ultimate choice

An investment decision eventually winds up with a look at the bottom line. Trulia Inc (NYSE:TRLA) appears a scratch in favor of Zillow, whose shares set a new 52-week high of $55.09 on Mar. 18. At this valuation, stock analysts believe, however, that Zillow Inc (NASDAQ:Z) seems stretched.

As a final take, therefore, Realogy currently offers a better proposition as an equity that can draw optimum gains from the dynamics of a recovering U.S. home market. For one, it has established realty franchises like Sotheby’s that can deliver solid results from Chinese investors. For the 4Q12, Realogy grew its revenue by 30% to $1.2 billion and EBITDA by 60% to $167 million, propelled by a 35% increase in sales volume.

For 1Q13, Realogy expects a 14–16% increase in sales volume. Moving forward this year, the company’s free cash flow is also expected to improve substantially as a result of the company’s efforts to refinance and reduce debts, which would significantly lower interest expense.

The article Chinese Elixir Potent for U.S. Home Market originally appeared on Fool.com and is written by Arturo Cuevas.

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