June was a month of ups and downs for many stocks, but two in particular had an especially good month: Zillow Group (Z) and Mobileye (MBLY). Both stocks gained over 20% last month. Here’s why:
Zillow Group Settles a Serious Legal Dispute
The main driving factor in Zillow’s surge last month had nothing to do with its services. The online real estate marketplace settled a legal dispute that put a lawsuit to bed that could have cost the company up to $1 billion.
Zillow agreed to pay a settlement of $130 million to several plaintiffs, including News Corp. (NWS), the National Association of Realtors and Move.com. The suit was centered on allegations that Zillow Group gained access to trade secrets after hiring former executives of Move.com. Zillow adamantly denied the allegations, and the settlement does not require the company to admit to any wrongdoing.
Settling the suit means Zillow can now use the $50-$55 million it set aside for legal costs to focus on innovation and growth. The company’s revenue is up 25% year-over-year, climbing to $186 million in the first quarter of the year.
Mobileye Secures Key Partnerships
To say Mobileye had a volatile month would be an understatement, but the company closed out June 21.5% higher.
Mobileye, which develops driver assistance sensor systems, is now trading at 140% its trailing earnings after posting 65% revenue growth.
But it was the announcement of two key partnerships that really sent Mobileye’s stock soaring.
Rumors emerged in mid-June that the company would be partnering with Intel (INTC) and BMW (BAMXF), and those rumors were confirmed on June 30 through a joint press conference.
Mobileye will be working with Intel to provide BMW with a better view of the environment around its vehicles.
The company still faces challenges, especially in the light of the first reported death related to driverless systems.
