In the video below, Zillow  CEO Spencer Rascoff answers a question about the company's nosebleed price-to-earnings multiple. Lofty P/E ratios may scare some investors, but it's important to understand the underlying growth prospects that result in such premiums.

If Zillow looks too rich for your blood, then you should take a look at the company The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

The article Should Investors Really Be Scared of Zillow's Multiple? originally appeared on Fool.com.

Austin Smith owns shares of Zillow. The Motley Fool recommends Zillow. The Motley Fool owns shares of Zillow. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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