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Move, Inc. - Attractive Play On Housing Recovery

 February 15, 2013 09:40 AM

(By Mani) Move, Inc. (NASDAQ: MOVE), which owns the popular Realtor.com site, remains an attractive play on the US housing recovery as the company is poised for strong revenue growth in 2013.

Campbell, California-based Move is a leading online real estate destination providing comprehensive content on rentals/ new homes/moving services and neighborhoods.

If the recent data from comScore is of any indication, then users are more engaged on Realtor.com compared to peers such as Zillow, Inc. (NASDAQ: Z) and Trulia, Inc. (NYSE: TRLA). Data from comScore reveals, on average, a user spends about 35 minutes minutes on Realtor.com, indicating greater engagement compared to about 20 minutes on Zillow and Trulia. A higher user engagement should support pricing increases.

[Related -Zillow Inc (Z) Q3 Earnings Preview: Another Huge Surprise In The House?]

The company claims that consumers viewed nearly 1.0 billion pages and spent nearly 1.0 billion minutes on the Realtor.com website in the fourth quarter, with about 95 percent of that usage occurring on properties for sale. Realtor.com continues to experience significant repeat usage with consumers visiting an average of approximately 4 times per month, nearly 50 percent more than the nearest competitor.

[Related -Trulia Inc (TRLA) Q3 Earnings Preview: A Tough Sell]

Realtor.com's mobile sites also outperformed Zillow and Trulia in Dec. 2012. Page views from mobile grew by 90 percent year-over-year, leads from mobile grew by more than 120 percent year-over-year, and nearly 50 percent of homes viewed across all platforms now occur on mobile devices in the fourth quarter. Additionally, mobile engagement as measured by pages viewed and leads delivered per user is 6-7 times that of the website.

Meanwhile, the acquisitions of TigerLead Solutions and Relocation.com should enhance lead-based revenues and increase pricing. Top Producer subscriptions also appear to be stabilizing.

Further, the ongoing recovery in the housing market means more people flocking to buy homes and they log on to sites such as Realtor.com, thereby improving user engagements and advertising rates.

For the fourth-quarter, revenue rose 12 percent to $52.7 million, but profit fell 53 percent to $1.6 million, or 4 cents a share due to amortization expenses related to two acquisitions the company made during the year.

However, the company's profits are expected to surge 175 percent in the first quarter and 258 percent in 2013, with sales growth of 10 percent and 9 percent, respectively.

For the quarter ending March 31, 2013, Move expects revenue of approximately $53.5-54.0 million and sees full-year revenue ranging between $222 million and $226 million. Analysts expect revenue of $54.13 million for the first quarter and $216.78 million for the full year.

In addition, Move sees adjusted EBITDA margin at about 11-12 percent for the first quarter and about 15 percent for 2013.

"With margins at an all-time low and the lag in listings revenue relative to improving real estate fundamentals, we expect EBITDA growth over the next several years. Longer term, we believe MOVE has the opportunity to leverage its user data to the benefit of its agent and broker customers," Oppenheimer analyst Jason Helfstein wrote in a note to clients.

Shares of Move currently trades at 1.6 times estimated 2013 sales compared to Trulia and Zillow at 5.9 times. On a price to earnings basis, Move shares trade at 21 times its 2013 consensus estimates, versus Zillow's 86 times and Trulia's 176 times. They were trading between $6.92 and $10.06 during the past 52-weeks.



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