Zillow Group Class A: Buy Rating Affirmed Amid Legal Challenges and Growth PotentialWe’ve been bracing for this filing, and at least it’s finally out now. We’re not alone in that regard, hence why the stock has shrugged off the headline so far. The multiple is arguably capped short-term as we work through the preliminary hearings on these cases, but underneath the headlines is a healthy and well-functioning marketplace compounding earnings, with housing market upside (this matters more than legal). Assessing the lawsuit. The case, filed in Washington state, alleges that Zillow is in violation of RESPA and the Washington Consumer Protection Act. It states that Zillow has created a structure in Preferred/Flex whereby agents receive kickbacks (i.e., are allowed to participate in the program) for referring consumers to ZHL for financing (i.e., it is built into the assessment criteria for agents).