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Zillow Group Inc Class A (ZG)
NASDAQ:ZG
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Zillow Group Class A
(NASDAQ:ZG)
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Select Model
Rating:62Neutral
Price Target:
$76.00
▲(12.71% Upside)
Zillow Group's overall stock score reflects a combination of strong earnings call performance and significant challenges in financial performance and valuation. The company's revenue growth and technological innovations are promising, but profitability issues and a negative P/E ratio weigh heavily on the score. Technical analysis suggests a neutral to bearish trend, further impacting the overall assessment.
Positive Factors
Revenue Growth
Zillow's strong revenue growth reflects its expanding market presence and effective business strategies, ensuring long-term sustainability.
Innovations in AI and Technology
Technological advancements in AI enhance Zillow's competitive edge, driving user engagement and operational efficiency.
Rentals Revenue Surge
The significant growth in rentals revenue, especially in multifamily, indicates strong demand and potential for future expansion.
Negative Factors
Profitability Challenges
Persistent profitability issues may hinder Zillow's ability to reinvest in growth and maintain financial health over time.
Negative Free Cash Flow Growth
Declining free cash flow limits Zillow's capacity to fund operations and strategic initiatives, affecting long-term growth.
Challenging Housing Market
A sluggish housing market could constrain Zillow's growth potential and impact its revenue streams in the near to medium term.
Zillow Group Class A (ZG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.08B
Dividend YieldN/A
Average Volume (3M)688.50K
Price to Earnings (P/E)―
Beta (1Y)1.28
Revenue Growth15.17%
EPS Growth75.90%
CountryUS
Employees6,819
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)0.44
Shares Outstanding49,633,034
10 Day Avg. Volume612,368
30 Day Avg. Volume688,499
Financial Highlights & Ratios
PEG Ratio5.03
Price to Book (P/B)3.42
Price to Sales (P/S)7.42
P/FCF Ratio58.19
Enterprise Value/Market Cap1.12
Enterprise Value/Revenue7.27
Enterprise Value/Gross Profit9.71
Enterprise Value/Ebitda66.35
Forecast
1Y Price Target
$86.79Price Target Upside28.71% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Zillow Group Class A Business Overview & Revenue Model
Company DescriptionZillow 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 MoneyZillow generates revenue through several key streams. Primarily, it earns money from its Premier Agent program, where real estate agents pay for advertising and leads generated from Zillow's platform. Additionally, Zillow's Zillow Offers segment allows the company to buy and sell homes directly, earning revenue through home sales and related services. The company also generates income from its rental marketplace, where property managers and landlords pay to list rental properties. Furthermore, Zillow provides mortgage services and earns revenue through its mortgage origination and refinancing services. Significant partnerships with real estate agents, brokerages, and mortgage lenders contribute to its earnings, enhancing its network and service offerings.
Zillow Group Class A Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 17, 2026
Earnings Call Sentiment Positive
The earnings call highlights strong revenue growth and innovations in technology, notably in AI and the rental sector. Despite challenges in the broader housing market and concerns about an FTC suit, Zillow demonstrates confidence in its strategy and future growth prospects.Q3-2025 Updates
Positive Updates
Strong Revenue Growth
Total revenue increased 16% year-over-year to $676 million in Q3, exceeding the high end of the outlook range.
Rentals Revenue Surge
Rentals revenue grew 41% year-over-year, with 62% year-over-year revenue growth in multifamily.
Positive Net Income and EBITDA Margin Expansion
Generated positive net income of $10 million in Q3, with EBITDA margin expanding more than 200 basis points year-over-year to 24%.
Zillow Home Loans Growth
Purchase loan origination volume grew 57% year-over-year to $1.3 billion, and mortgages revenue was up 36%.
Innovations in AI and Technology
Launched AI-powered virtual staging and debuted the Zillow app inside ChatGPT, showcasing rapid innovation.
Negative Updates
Challenging Housing Market
The housing market is described as 'bouncing along the bottom,' indicating ongoing challenges in the broader market environment.
FTC Suit Concerns
Concerns regarding the FTC suit related to syndicating multifamily property listings to Redfin, although Zillow remains confident in its position.
Company Guidance
During Zillow Group's Third Quarter 2025 Financial Results Call, the company provided optimistic guidance, highlighting strong financial performance with a 16% year-over-year increase in total revenue, reaching $676 million. This exceeded their outlook, driven by robust growth in both their For Sale and Rentals operations. For Sale revenue rose 10%, with residential and mortgage revenues increasing by 7% and 36% respectively. Rentals revenue saw a significant 41% increase, particularly in multifamily, which surged 62% year-over-year. Operational efficiency was evident as adjusted EBITDA reached $165 million, with a margin expansion of over 200 basis points. Zillow continues to target mid-teens revenue growth, expanding EBITDA margins, and positive GAAP net income for the full year 2025, while setting sights on a $1 billion annual revenue opportunity in Rentals and further growth through innovative initiatives like the Zillow Pro and Zillow Preferred programs.Zillow Group Class A Financial Statement Overview
Summary
Zillow Group's financial statements present a mixed picture. The company shows revenue growth and a strong gross profit margin, but struggles with profitability and cash flow generation. The balance sheet is solid with low leverage, but negative returns on equity highlight profitability challenges. Overall, while the company is financially stable, it needs to focus on enhancing profitability and cash flow to improve its financial health.Income Statement
Zillow Group's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) revenue growth rate is positive at 3.98%, indicating a recovery from previous declines. However, the company struggles with profitability, as evidenced by negative net profit and EBIT margins. The gross profit margin remains strong at 74.87%, suggesting efficient cost management. Overall, while revenue is growing, the company needs to address its profitability issues.Balance Sheet
The balance sheet reflects a strong equity position with a low debt-to-equity ratio of 0.019 in the TTM, indicating minimal leverage. However, the return on equity is negative, highlighting challenges in generating returns for shareholders. The equity ratio is solid, suggesting financial stability. Overall, the balance sheet is robust, but improving profitability is crucial for enhancing shareholder returns.Cash Flow
Cash flow analysis reveals some concerns. The TTM free cash flow growth rate is negative, indicating a decline in cash generation. The operating cash flow to net income ratio is healthy at 0.72, but the free cash flow to net income ratio is lower at 0.65, suggesting limited cash flow relative to earnings. While operating cash flow remains positive, the company needs to focus on improving free cash flow generation.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.48B | 2.24B | 1.95B | 1.96B | 2.13B | 1.62B |
| Gross Profit | 1.86B | 1.71B | 1.52B | 1.59B | 1.81B | 1.37B |
| EBITDA | 272.00M | 179.00M | 104.00M | 130.00M | 382.00M | 272.00M |
| Net Income | -32.00M | -112.00M | -158.00M | -101.00M | -528.00M | -162.00M |
Balance Sheet | ||||||
| Total Assets | 5.70B | 5.83B | 6.65B | 6.56B | 10.70B | 7.49B |
| Cash, Cash Equivalents and Short-Term Investments | 1.39B | 1.86B | 2.81B | 3.36B | 2.83B | 3.92B |
| Total Debt | 367.00M | 660.00M | 1.83B | 1.87B | 1.60B | 2.52B |
| Total Liabilities | 706.00M | 981.00M | 2.13B | 2.08B | 5.35B | 2.74B |
| Stockholders Equity | 4.99B | 4.85B | 4.53B | 4.48B | 5.34B | 4.74B |
Cash Flow | ||||||
| Free Cash Flow | 265.00M | 285.00M | 189.00M | 4.36B | -3.28B | 315.68M |
| Operating Cash Flow | 418.00M | 428.00M | 354.00M | 4.50B | -3.18B | 424.20M |
| Investing Cash Flow | 318.00M | 395.00M | 25.00M | -1.53B | 1.09B | -1.04B |
| Financing Cash Flow | -932.00M | -1.23B | -352.00M | -4.34B | 3.15B | 1.16B |
Zillow Group Class A Technical Analysis
Negative
67.43
Price Trends
69.74
Negative
73.70
Negative
71.64
Negative
Market Momentum
-1.03
Positive
45.23
Neutral
31.92
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZG, the sentiment is Negative. The current price of 67.43 is below the 20-day moving average (MA) of 68.79, below the 50-day MA of 69.74, and below the 200-day MA of 71.64, indicating a bearish trend. The MACD of -1.03 indicates Positive momentum. The RSI at 45.23 is Neutral, neither overbought nor oversold. The STOCH value of 31.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZG.
Zillow Group Class A Risk Analysis
Zillow Group Class A disclosed 50 risk factors in its most recent earnings report. Zillow Group Class A 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 A Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.88B | 13.36 | 20.37% | ― | 5.35% | 33.74% | |
62 Neutral | $16.08B | -475.53 | -0.66% | ― | 15.17% | 75.90% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
58 Neutral | $16.08B | -480.75 | -0.66% | ― | 15.17% | 75.90% | |
58 Neutral | $803.82M | -12.70 | -14.07% | ― | 6.65% | 50.32% | |
55 Neutral | $201.86M | 74.35 | 1.22% | ― | 17.38% | ― | |
54 Neutral | $205.45M | -10.80 | -15.37% | ― | 6.18% | 28.04% |
* Communication Services Sector Average
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Zillow Group Class A
67.43
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-1.39%
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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.