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Zillow Group Inc Class A (ZG)
NASDAQ:ZG
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Zillow Group Class A (ZG) AI Stock Analysis

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ZG

Zillow Group Class A

(NASDAQ:ZG)

Rating:71Outperform
Price Target:
$90.00
▲(10.96% Upside)
Zillow Group's overall score is driven by strong technical momentum and positive corporate events, despite valuation challenges and profitability issues. The company's strategic financial moves and market leadership in Rentals contribute positively, while the broader market uncertainties and lack of profitability weigh on the score.
Positive Factors
Financial Performance
Zillow reported solid Q2 results, with revenue coming in approximately 1% ahead of consensus and profitability at the high end of the outlook range.
Partnerships and Growth
Zillow's partnership with Redfin has boosted Rentals growth, adding 9K new multifamily properties and increasing wallet share with large property managers.
Negative Factors
Housing Market Conditions
Expectations for continued housing market weakness are likely to limit volume growth and any meaningful positive estimate revisions.
Market Valuation
Despite constructive execution, there is limited potential for further multiple expansion due to stock trading above historical valuation.

Zillow Group Class A (ZG) vs. SPDR S&P 500 ETF (SPY)

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 Group generates revenue primarily through its online real estate marketplace and related services. Key revenue streams include: (1) Premier Agent: Zillow charges real estate agents for advertising and leads generated through its platform. Agents pay for enhanced visibility and access to potential clients. (2) Zillow Offers: Previously, Zillow directly participated in buying and selling homes through this program, although it is currently winding down. (3) Rentals Marketplace: Revenue is generated from property management companies and landlords who pay for advertising rental properties. (4) Mortgages: Zillow offers advertising and leads to mortgage lenders and receives fees for connecting them with potential borrowers. Additionally, Zillow earns from display advertising on its websites and mobile applications. Partnerships with real estate professionals and integration of various services also contribute to its financial growth.

Zillow Group Class A Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: -0.49%|
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
Zillow's earnings call presented strong performance metrics with significant growth in Rentals and positive net income, supported by effective cost management. However, challenges remain in the broader housing market and macroeconomic environment.
Q2-2025 Updates
Positive Updates
Double-Digit Revenue Growth
Zillow reported a total revenue increase of 15% year-over-year in Q2 2025, exceeding expectations, with a strong performance in For Sale and Rentals segments.
Rentals Revenue Surge
Rentals revenue grew by 36% year-over-year in Q2, with multifamily revenue up 56% and property count up 45% year-over-year.
Positive Net Income
Zillow reported its second consecutive quarter of positive GAAP net income, driven by strong revenue performance and effective cost management.
Zillow Home Loans Success
Purchase loan origination volume for Zillow Home Loans grew 48% year-over-year to $1.1 billion in Q2, contributing to a 41% increase in mortgages revenue.
Market Leadership in Rentals
Zillow Rentals maintains the #1 position in rentals traffic with 36 million average monthly unique visitors, and the largest property count in the category with 2.4 million active rental listings.
Negative Updates
Flat Housing Market
Despite strong company performance, the broader housing and mortgage market remained essentially flat, posing ongoing challenges.
High Fixed Costs
Total operating expenses and cost of revenue combined grew 9% year-over-year, highlighting the challenge of managing costs despite revenue growth.
Macroeconomic Uncertainty
The outlook for the housing market remains uncertain with ongoing macroeconomic challenges and affordability issues.
Company Guidance
In the second quarter of fiscal year 2025, Zillow Group reported strong financial results, showcasing a 15% year-over-year increase in total revenue, reaching $655 million, and achieving $155 million in EBITDA, marking a 24% EBITDA margin. The company experienced a 9% rise in For Sale revenue, with residential revenue up by 6% and mortgages revenue surging by 41%. Rentals revenue also exhibited robust growth at 36% year-over-year, driven by a 56% increase in multifamily revenue. Zillow maintained its market leadership with 243 million average monthly unique users and continued to gain share in both For Sale and Rentals. The company is on track to meet its full-year targets, expecting mid-teens revenue growth for 2025, and remains focused on expanding its Enhanced Markets and improving the digital real estate transaction experience.

Zillow Group Class A Financial Statement Overview

Summary
Zillow Group shows moderate revenue growth and strong cost management, but struggles with profitability and decreasing free cash flow. The strong equity position and low leverage provide stability, yet profitability and cash flow sustainability need improvement.
Income Statement
65
Positive
Zillow Group's revenue shows a moderate growth trend with a 3.09% increase TTM over the previous year. However, the company is struggling with profitability, as indicated by negative EBIT and net income margins in the TTM period, although there's a slight improvement compared to the prior year. Gross profit margin remains strong at 76.45%, suggesting effective cost management in core operations.
Balance Sheet
70
Positive
The balance sheet of Zillow Group is solid with a low debt-to-equity ratio of 0.14, indicating financial stability and low leverage. Stockholders' equity constitutes a substantial 82.74% of total assets, reflecting a strong equity position. However, the company has negative net income, affecting its return on equity.
Cash Flow
60
Neutral
The TTM cash flow shows positive free cash flow, though it has decreased compared to the previous report. The operating cash flow to net income ratio is robust, demonstrating efficient cash generation from operations despite negative net income. However, the decrease in free cash flow growth rate is a concern.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.31B2.24B1.95B1.96B8.15B3.34B
Gross Profit1.76B1.71B1.52B1.59B1.75B1.58B
EBITDA122.00M198.00M125.00M123.00M370.00M119.96M
Net Income-81.00M-112.00M-158.00M-88.00M-527.78M-162.12M
Balance Sheet
Total Assets5.75B5.83B6.65B6.56B10.70B7.49B
Cash, Cash Equivalents and Short-Term Investments1.60B1.86B2.81B3.36B3.13B3.92B
Total Debt687.00M660.00M1.83B1.87B5.01B2.52B
Total Liabilities992.00M981.00M2.13B2.08B5.35B2.74B
Stockholders Equity4.75B4.85B4.53B4.48B5.34B4.74B
Cash Flow
Free Cash Flow204.00M285.00M189.00M4.36B-3.28B315.68M
Operating Cash Flow452.00M428.00M354.00M4.50B-3.18B424.20M
Investing Cash Flow547.00M395.00M25.00M-1.53B1.09B-1.04B
Financing Cash Flow-1.52B-1.23B-352.00M-4.34B3.15B1.16B

Zillow Group Class A Technical Analysis

Technical Analysis Sentiment
Positive
Last Price81.11
Price Trends
50DMA
72.13
Positive
100DMA
69.09
Positive
200DMA
71.02
Positive
Market Momentum
MACD
2.40
Negative
RSI
68.40
Neutral
STOCH
74.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZG, the sentiment is Positive. The current price of 81.11 is above the 20-day moving average (MA) of 77.09, above the 50-day MA of 72.13, and above the 200-day MA of 71.02, indicating a bullish trend. The MACD of 2.40 indicates Negative momentum. The RSI at 68.40 is Neutral, neither overbought nor oversold. The STOCH value of 74.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZG.

Zillow Group Class A Risk Analysis

Zillow Group Class A disclosed 49 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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$2.14B16.4319.74%5.93%29.17%
73
Outperform
$19.75B-1.34%14.96%49.24%
71
Outperform
$19.75B-1.34%14.96%49.24%
69
Neutral
$19.03B-0.39%9.27%95.03%
64
Neutral
$3.11B89.257.98%0.63%15.34%
61
Neutral
$41.49B-3.35-10.67%4.00%2.69%-42.23%
51
Neutral
$661.88M-18.77%12.01%35.71%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ZG
Zillow Group Class A
81.11
33.41
70.04%
YELP
Yelp
34.18
0.67
2.00%
Z
Zillow Group Class C
84.63
35.23
71.32%
TWLO
Twilio
122.39
61.76
101.86%
CARG
CarGurus
31.41
9.01
40.22%
NXDR
Nextdoor Holdings
1.83
-0.89
-32.72%

Zillow Group Class A Corporate Events

Executive/Board ChangesShareholder Meetings
Zillow Group Elects Directors at Annual Meeting
Neutral
Jun 3, 2025

On June 2, 2025, Zillow Group held its 2025 Annual Meeting of Shareholders, where shareholders voted to elect four Class II directors and ratified the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. The election of directors and the ratification of the accounting firm are significant for Zillow Group’s governance and financial oversight, impacting its operational stability and stakeholder confidence.

The most recent analyst rating on (ZG) stock is a Buy with a $95.00 price target. To see the full list of analyst forecasts on Zillow Group Class A stock, see the ZG Stock Forecast page.

Private Placements and FinancingFinancial Disclosures
Zillow Group Settles Convertible Senior Notes Debt
Positive
May 16, 2025

On May 15, 2025, Zillow Group, Inc. fully settled its $419 million outstanding principal amount of 2.75% Convertible Senior Notes due 2025, rendering the company debt-free except for credit facility borrowings for Zillow Home Loans. The settlement involved cash payments totaling approximately $425 million and the issuance of 1,385 shares of Class C capital stock, marking a significant financial milestone for the company.

The most recent analyst rating on (ZG) stock is a Buy with a $95.00 price target. To see the full list of analyst forecasts on Zillow Group Class A stock, see the ZG Stock Forecast page.

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Zillow Group Authorizes $1 Billion Stock Buyback
Positive
May 7, 2025

On May 7, 2025, Zillow Group announced its Board of Directors authorized an additional $1 billion for stock repurchases, supplementing previous authorizations. The company reported strong financial results for Q1 2025, with revenue up 13% year over year to $598 million, driven by growth in various segments including Premier Agent offerings and rental services. Zillow’s strategic expansion and effective execution have positioned it for sustainable profitable growth, with increased traffic to its platforms and a positive outlook for the year.

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.Date of analysis: Aug 07, 2025