Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online real estate marketplace operator Zillow (Nasdaq: Z ) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Zillow's business and see what CAPS investors are saying about the stock right now.
||Internet software and services
||Co-Founder/Chairman Richard Barton
CEO Spencer Rascoff
|Trailing-12-Month Return on Equity
||$76.9 million / $0
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 71% of the 216 members who have rated Zillow believe the stock will underperform the S&P 500 going forward.
Just last month, one of those Fools, All-Star LoveMeSomeGreen, offered some insight into the bear case:
Epically poor customer service will get you absolutely nowhere in the long-run, both in valuation-sense and business-sense. It's nearly impossible to get someone on the phone @ this company. They may be the "hot" item in online Real Estate today, but they have ZERO moat around their services. It's just a matter of time before some other website offering the exact same service w/ higher overall quality and customer service becomes the next hot ticket and Zillow will become an afterthought. Full disclosure, I'm a real estate agent, and I consistently have problems with these people, typically it takes days instead of minutes to deal w/ small problems and I've never had anything but a totally infuriating experience.
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