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Zillow Group Class C (Z)
NASDAQ:Z
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Zillow Group Class C
(NASDAQ:Z)
Rating:68Neutral
Price Target:
$75.00
▲(3.41%Upside)
Positive Factors
New Partnerships
Z's recently launched partnership with RDFN provides a notable unlock of additional rental supply, allowing Z's two-sided marketplace to further benefit.
Product Expansion
The expansion of Real Time Touring will help drive higher lead conversion and reignite monetization, helping Premier Agent return to growth consistent with or better than the housing market.
Revenue Growth
Rentals revenue grew 33% and now comprise 22% of total revenue; $1bn target reaffirmed as the multifamily strategy is showing strong traction.
Negative Factors
Guidance
Guidance for the second quarter was slightly below estimates on both the top and bottom lines.
Market Expectations
Zillow shares traded down following the 1Q results, due to less upside in the 1Q revenue than anticipated and 1Q Residential revenue growth decelerating from 11% in 4Q to 6%.
Residential Revenue
Residential revenue continues to face market-driven headwinds, growing only 6% year over year.
Zillow Group Class C (Z) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$17.40B
Dividend YieldN/A
Average Volume (3M)1.75M
Price to Earnings (P/E)―
Beta (1Y)1.33
Revenue Growth14.96%
EPS Growth49.24%
CountryUS
Employees6,819
SectorCommunication Services
Sector Strength83
IndustryInternet Content & Information
Share Statistics
EPS (TTM)0.41
Shares Outstanding183,358,690
10 Day Avg. Volume1,786,983
30 Day Avg. Volume1,746,682
Financial Highlights & Ratios
PEG Ratio1.07
Price to Book (P/B)1.74
Price to Sales (P/S)0.00
P/FCF Ratio1.79
Enterprise Value/Market Cap0.47
Enterprise Value/Revenue0.94
Enterprise Value/Gross Profit4.65
Enterprise Value/Ebitda17.79
Forecast
1Y Price Target
$82.17Price Target Upside13.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Zillow Group Class C Business Overview & Revenue Model
Company DescriptionZillow Group Class C (Z) is a leading online real estate platform based in the United States. The company specializes in providing comprehensive real estate services through its websites and mobile applications, offering tools for home buyers, sellers, renters, and real estate professionals. Zillow Group operates in sectors including real estate advertising, mortgage lending, and home sales, with core services centered around property listings, market analytics, and agent connections.
How the Company Makes MoneyZillow Group makes money primarily through its real estate ecosystem, which includes advertising, leads, and ancillary services. The company generates significant revenue from its Premier Agent program, where real estate professionals pay for advertising and receive leads from interested buyers and sellers. Additionally, Zillow offers paid services for rental professionals and property managers through Zillow Rentals. Another key revenue stream is Zillow Home Loans, providing mortgage origination and related services. The company also gains revenue from its Zillow Offers program, where it buys, sells, and rents properties directly, though this segment's focus has shifted over time. Strategic partnerships with real estate brokerages and technology integrations further enhance its revenue potential.
Zillow Group Class C Key Performance Indicators (KPIs)
Any
Average Unique Monthly Visitors
Measures the average number of distinct visitors to Zillow’s platforms each month, indicating the site’s popularity and potential for ad revenue growth.
Measures the average number of distinct visitors to Zillow’s platforms each month, indicating the site’s popularity and potential for ad revenue growth.
Data provided by:
Main Street Data
Main Street DataZillow Group Class C Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 6.85%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
Zillow Group's Q1 2025 earnings call reflected strong revenue growth and achievement of GAAP profitability, driven by impressive performance in the Rentals segment and strategic expansions. However, the housing market remains challenging, especially in the non-high-end segments. The company is facing increased expenses in the next quarter due to seasonal factors and partnerships.Q1-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Zillow Group reported Q1 2025 revenue of $598 million, up 13% year-over-year, exceeding their expectations and continuing the trend of double-digit revenue growth.
Strong Performance in Rentals Segment
Rentals revenue reached an all-time high of $129 million in Q1, up 33% year-over-year. Multifamily revenue grew 47%, and the number of multifamily properties on Zillow Rentals increased by 38% year-over-year.
GAAP Profitability Achieved
Zillow achieved GAAP profitability in Q1 2025 with a positive net income of $8 million and an EBITDA margin expansion by 200 basis points year-over-year to 26%.
Increased Adoption of Zillow Home Loans
Double-digit adoption of Zillow Home Loans across all Enhanced Markets was noted, with 70% of movers choosing financing through Zillow Home Loans also working with a Premier Agent partner.
Expansion of Enhanced Markets
The company expanded Enhanced Markets, with 24% of overall connections in Q1 happening in these markets, up from 21% in Q4. They aim to increase this to more than 35% by the end of the year.
Negative Updates
Challenging Housing Market Conditions
The housing market remains challenging with macroeconomic uncertainties, impacting overall For Sale growth, which only grew 8% year-over-year.
High-End Market Outperformance
The high-end of the market contributed over 500 basis points of growth in total industry transaction value, while the rest of the market remained largely flat, which is where Zillow tends to operate more frequently.
Increased Expenses in Q2
EBITDA expenses are expected to increase from $445 million in Q1 to an estimated $495 million in Q2, driven by normal seasonal marketing and incremental lead costs associated with the Redfin Rentals partnership.
Company Guidance
During Zillow Group's first quarter 2025 financial results call, the company provided guidance indicating a strong performance and optimistic outlook for the year. Zillow reported a total Q1 revenue of $598 million, marking a 13% year-over-year increase, with For Sale revenue growing 8%, Residential revenue up 6%, Mortgages revenue up 32%, and Rentals revenue increasing 33% to reach $129 million. The company achieved a GAAP profitability milestone with an adjusted EBITDA of $153 million, expanding the EBITDA margin by 200 basis points to 26%. Zillow aims for full-year 2025 goals of low to mid-teens revenue growth, continued EBITDA margin expansion, and positive GAAP net income. The company highlighted its strategic focus on expanding its housing super app, increasing market share in the Rental segment, and enhancing its services for buyers and sellers, contributing to its robust financial outlook.Zillow Group Class C Financial Statement Overview
Summary
Zillow's financial performance shows strong revenue growth and a solid balance sheet, but challenges in profitability and operational costs persist. The income statement reveals consistent net losses, while the balance sheet maintains a high equity ratio and low leverage risk. Cash flow management is effective, but declining free cash flow growth indicates potential constraints.Income Statement
The income statement reveals a company facing consistent net losses, with a net profit margin of -3.5% in TTM (Trailing-Twelve-Months). However, revenue demonstrates a positive growth trend, with a 3.1% increase from the previous year. Gross profit margins remain strong at 76.5%, indicating efficient core operations, but negative EBIT and EBITDA margins suggest challenges in managing operational costs.70
Positive
Balance Sheet
The balance sheet is strong with a high equity ratio of 82.7% and a low debt-to-equity ratio of 0.14, indicating a solid financial structure with limited leverage risk. Return on equity is negative due to net losses, but the company's substantial equity base provides a buffer against financial volatility.75
Positive
Cash Flow
Cash flow analysis shows a decrease in free cash flow growth, but a positive operating cash flow to net income ratio of -5.58 suggests effective cash management. The free cash flow to net income ratio is 2.52, highlighting that the company generates significant cash relative to its net loss, though capital expenditure constraints may limit growth.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.31B | 2.24B | 1.95B | 1.96B | 8.15B | 3.34B |
| Gross Profit | 1.76B | 1.71B | 1.52B | 1.59B | 1.75B | 1.58B |
| EBITDA | 122.00M | 198.00M | 125.00M | 123.00M | 370.00M | 119.96M |
| Net Income | -81.00M | -112.00M | -158.00M | -88.00M | -527.78M | -162.12M |
Balance Sheet | ||||||
| Total Assets | 5.75B | 5.83B | 6.65B | 6.56B | 10.70B | 7.49B |
| Cash, Cash Equivalents and Short-Term Investments | 1.60B | 1.86B | 2.81B | 3.36B | 3.13B | 3.92B |
| Total Debt | 687.00M | 660.00M | 1.83B | 1.87B | 5.01B | 2.52B |
| Total Liabilities | 992.00M | 981.00M | 2.13B | 2.08B | 5.35B | 2.74B |
| Stockholders Equity | 4.75B | 4.85B | 4.53B | 4.48B | 5.34B | 4.74B |
Cash Flow | ||||||
| Free Cash Flow | 204.00M | 285.00M | 189.00M | 4.36B | -3.28B | 315.68M |
| Operating Cash Flow | 452.00M | 428.00M | 354.00M | 4.50B | -3.18B | 424.20M |
| Investing Cash Flow | 547.00M | 395.00M | 25.00M | -1.53B | 1.09B | -1.04B |
| Financing Cash Flow | -1.52B | -1.23B | -352.00M | -4.34B | 3.15B | 1.16B |
Zillow Group Class C Technical Analysis
Positive
72.53
Price Trends
68.56
Positive
70.09
Positive
71.37
Positive
Market Momentum
0.71
Negative
61.66
Neutral
84.83
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For Z, the sentiment is Positive. The current price of 72.53 is above the 20-day moving average (MA) of 70.06, above the 50-day MA of 68.56, and above the 200-day MA of 71.37, indicating a bullish trend. The MACD of 0.71 indicates Negative momentum. The RSI at 61.66 is Neutral, neither overbought nor oversold. The STOCH value of 84.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for Z.
Zillow Group Class C Risk Analysis
Zillow Group Class C disclosed 49 risk factors in its most recent earnings report. Zillow Group Class C reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Zillow Group Class C Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $2.25B | 16.94 | 19.74% | ― | 5.93% | 29.17% | |
68 Neutral | $17.40B | ― | -1.72% | ― | 14.96% | 49.24% | |
67 Neutral | $3.33B | 94.56 | 7.98% | ― | 0.63% | 15.34% | |
66 Neutral | $17.40B | ― | -1.72% | ― | 14.96% | 49.24% | |
61 Neutral | $41.26B | -0.79 | -14.19% | 3.78% | 2.39% | -73.52% | |
60 Neutral | $3.10B | ― | -15.07% | ― | -18.11% | -516.37% | |
51 Neutral | $619.79M | ― | -18.77% | ― | 12.01% | 35.71% |
* Communication Services Sector Average
Performance Comparison
Z
Zillow Group Class C
72.53
25.67
54.78%
YELP
Yelp
35.21
-1.17
-3.22%
ZG
Zillow Group Class A
70.31
25.00
55.18%
CARG
CarGurus
33.70
8.71
34.85%
IAC
IAC/InteractiveCorp.
38.81
0.36
0.94%
KIND
Nextdoor Holdings
1.62
-1.05
-39.33%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.