Zillow Group Class C (Z) AI Stock Analysis

• Market Cap: $20.05B
• Dividend Yield: N/A
• Average Volume (3M): 2.82M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.31
• Revenue Growth: 15.31%
• EPS Growth: 56.19%
• Country: US
• Employees: 6,819
• Sector: Communication Services
• Sector Strength: 86
• Industry: Internet Content & Information
• EPS (TTM): 0.40
• Shares Outstanding: 185,964,750
• 10 Day Avg. Volume: 3,546,082
• 30 Day Avg. Volume: 2,822,440
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.84
• Enterprise Value/Revenue: 7.03
• Enterprise Value/Gross Profit: 9.28
• Enterprise Value/Ebitda: 71.16
• 1Y Price Target: $87.57
• Price Target Upside: 7.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 72 Outperform
• Price Target: $94.00 ▲(15.91% Upside)

Zillow Group's strong technical performance and positive earnings call sentiment are key strengths, driving the overall score. Financial performance shows promise but is hindered by profitability challenges. Valuation remains a concern due to negative earnings.

Positive Factors

Platform Engagement

Growth in average monthly unique users accelerated to 5% in 1Q, showing increased engagement with Zillow's platform.

Rentals Growth

The strong execution in Rentals, with revenue growth accelerating from 25% in 4Q to 33% in 1Q, including multifamily revenue growing 47% year-over-year, is encouraging.

Revenue Growth

Zillow remains on track to grow 2025 revenue by mid-teens%, expand Adjusted EBITDA margin, and reach positive GAAP net income despite the housing market remaining depressed.

Negative Factors

Guidance Shortfall

Zillow's 2Q results did not have the usual upside compared to the guidance and expectations, especially with Adjusted EBITDA coming in line with the high end of the guidance.

Incremental Investments

Incremental investments in growth initiatives limit the flow through of the beat to future periods.

Residential Revenue Deceleration

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%.

Zillow Group Class C Business Overview & Revenue Model

Company Description

Zillow Group, Inc., a digital real estate company, operates real estate brands on mobile applications and Websites in the United States. The company operates through three segments: Homes; Internet, Media & Technology; and Mortgages. The Homes segment is involved in resale of homes; and title and escrow services to home buyers and sellers, including title search procedures for title insurance policies, escrow, and other closing services. The IMT segment offers premier agent, rentals, and new construction marketplaces, as well as dotloop, display, and other advertising, as well as business software solutions. The Mortgage segment provides home loans; and marketing products including custom quote and connect services. Its portfolio of brands includes Zillow Rentals, Trulia, StreetEasy, Zillow Closing Services, HotPads, and Out East. The company was incorporated in 2004 and is headquartered in Seattle, Washington.

How the Company Makes Money

Zillow 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 Financial Statement Overview

Summary

Zillow Group shows positive revenue growth and strong cash flow management with a healthy balance sheet. However, challenges remain in achieving profitability, as indicated by negative net income and return on equity.

Income Statement

Zillow Group's revenue has shown a modest growth of 3.6% in the TTM, indicating a positive trend after previous fluctuations. The gross profit margin remains strong at 75.8%, reflecting efficient cost management. However, the company is still facing challenges with profitability, as evidenced by a negative net profit margin of -2.6% and negative EBIT margin. The EBITDA margin is positive at 9.7%, suggesting some operational efficiency improvements.

Balance Sheet

The balance sheet shows a healthy debt-to-equity ratio of 0.07, indicating low leverage and financial stability. However, the return on equity is negative at -1.3%, reflecting ongoing challenges in generating returns for shareholders. The equity ratio is strong, suggesting a solid capital structure with a significant portion of assets financed by equity.

Cash Flow

Zillow Group's cash flow statement highlights a significant improvement in free cash flow growth at 72.1%, indicating better cash management. The operating cash flow to net income ratio is strong at 0.89, showing efficient cash generation relative to net income. The free cash flow to net income ratio of 0.73 further supports the company's ability to generate cash despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.39B	2.24B	1.95B	1.96B	8.15B	3.34B
Gross Profit	1.81B	1.71B	1.52B	1.59B	1.75B	1.58B
EBITDA	236.00M	198.00M	125.00M	123.00M	370.00M	119.96M
Net Income	-62.00M	-112.00M	-158.00M	-88.00M	-527.78M	-162.12M
Balance Sheet
Total Assets	5.42B	5.83B	6.65B	6.56B	10.70B	7.49B
Cash, Cash Equivalents and Short-Term Investments	1.16B	1.86B	2.81B	3.36B	2.83B	3.92B
Total Debt	328.00M	660.00M	1.83B	1.87B	1.60B	2.52B
Total Liabilities	670.00M	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	351.00M	285.00M	189.00M	4.36B	-3.28B	315.68M
Operating Cash Flow	484.00M	428.00M	354.00M	4.50B	-3.18B	424.20M
Investing Cash Flow	627.00M	395.00M	25.00M	-1.53B	1.09B	-1.04B
Financing Cash Flow	-1.70B	-1.23B	-352.00M	-4.34B	3.15B	1.16B

Zillow Group Class C Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 81.10
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For Z, the sentiment is Neutral. The current price of 81.1 is below the 20-day moving average (MA) of 82.19, above the 50-day MA of 76.94, and above the 200-day MA of 74.32, indicating a neutral trend. The MACD of 1.58 indicates Positive momentum. The RSI at 51.76 is Neutral, neither overbought nor oversold. The STOCH value of 42.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for Z.

Zillow Group Class C Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZG	75 Outperform	$20.05B	―	-1.34%	―	15.31%	56.19%
CARG	73 Outperform	$3.21B	25.57	29.24%	―	4.80%	―
Z	72 Outperform	$20.05B	―	-1.34%	―	15.31%	56.19%
YELP	70 Outperform	$1.95B	14.03	20.13%	―	5.37%	13.08%
Sector *	56 Neutral	HK$68.37B	0.28	-4.91%	5.02%	-0.86%	-12.88%
NXDR	54 Neutral	$766.77M	―	-14.27%	―	9.65%	56.50%
IAC	52 Neutral	$2.85B	―	-8.49%	―	-23.79%	-138.59%