I have been a bull on Zillow ($Z) since the summer of 2013 (read here) and watched the stock soar from $90 to $160 in less than 12 months. Being bullish on a growth/momentum stock like Zillow ($Z) requires one to dig a little deeper to find value, as those using typical metrics usually find themselves on the sidelines and miss out on a big run .
Some of the metrics I used to back my bull case on Zillow , was the hot housing market, along with the continued user growth of Zillow's mobile app and website. I considered Zillow a disruptor in the Real Estate sector and as long as they continued to show huge growth, the companies fundamentals would catch up with it's lofty stock price. Unfortunately I feel like the trend has started to change, and Zillow's ($Z) growth has slowed enough to warrant a lower stock price.
Visits to Zillow's website seems to have plateaued since July, with Unique User Visits dropping from 84 million to 72 million as of November:
Other sources like Alexa and Google Trends point to the same conclusion - less people are using the site. You can see the Alexa data I pulled in the spring, and compare it with today and see the drastic difference in the traffic:
Last but not least, was the November Existing Home Sales number that came in at a 6 month low on Monday. Is it the start of a trend, or just a blip? It will be a few months before we have an answer, but I think it puts some pressure on Zillow ($Z).
The Housing market is typically slower in the winter, so some of the weakness can be explained, but a momentum stock like Zillow ($Z) is usually not given the same free pass that a mature company might be given.
I added some puts today and may look to continue to add puts for a move under $100 on Zillow($Z) in the coming weeks.