ZipRealty, Inc. (NASDAQ:ZIPR)

CAPS Rating: No stars

The Company is a full-service residential real estate brokerage firm, using the Internet, proprietary technology and efficient business processes to provide home buyers and sellers with high-quality service and value.

Recs

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Player Avatar Har1en (99.30) Submitted: 2/25/2008 4:07:01 PM : Outperform Start Price: $5.59 ZIPR Score: -16.94

Ziprealty has been trounced by the housing issues and loan issues popular in the press. These things do exist, however, in the long term, ZIPR will come out on top. They are an expanding discount broker, well suited to weather any market storm better than their competitors because they have built into their model cheap overhead and economies of scale on their website. They do depend on volume for earnings, however, and today the volume is not there. People are waiting to move, and the numbers will change eventually. Best of all, they are luring agents from other brokerages with the promise of regular paychecks and luring customers with the promise of great service and low commissions. I simply don't see how the brick-n-mortar brokerages can compete with their rates so much higher and their rents to pay on office space. They get away with a lot by reducing agent compensation if the agent fails, but that creates a poor incentive for those agents to stay. Once they start losing folks to ZIPR, I don't think they're likely to get them back.

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