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Zillow Group Inc Class C (Z)
:Z
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Zillow Group Class C
(NASDAQ:Z)58Neutral
Positive Factors
Revenue Growth
Rentals Revenue is expected to accelerate to 30% growth from 25%.
Strategic Partnerships
Z announced a new multi-year partnership with RDFN, which will now host and provide lead generation for Z’s rental inventory.
Negative Factors
Guidance Concerns
4Q results did not meet the elevated expectations & a more challenging housing market expected weighed on the outlook.
Zillow Group Class C (Z) vs. S&P 500 (SPY)
Market Cap
$17.96B
Dividend YieldN/A
Average Volume (3M)2.99M
Price to Earnings (P/E)―
Beta (1Y)1.92
Revenue Growth14.96%
EPS Growth29.56%
CountryUS
Employees6,856
SectorCommunication Services
Sector Strength85
IndustryInteractive Multi-Media
Share Statistics
EPS (TTM)-0.48
Shares Outstanding182,007,340
10 Day Avg. Volume2,733,442
30 Day Avg. Volume2,989,593
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)7.81
Price to Cash Flow (P/CF)35.80
P/FCF Ratio49.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$92.20Price Target Upside23.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Zillow Group Class C Business Overview & Revenue Model
Company DescriptionZillow Group, Inc. is an online real estate marketplace. The company engages in providing information about residential homes, real estate listings and mortgages on its mobile application and website.Its platform offers renting, buying, selling, and financing services for residential real estate across the United States. Additionally, the company provides advertising services and marketing software and technology solutions.
How the Company Makes MoneyZillow Group primarily generates revenue through its Premier Agent program, where real estate agents and brokers pay for advertising services to connect with potential homebuyers and sellers on the platform. The company also earns from its Rentals segment by charging landlords and property managers to list rental properties on its site. Additionally, Zillow's Mortgages segment provides revenue through lead generation for mortgage lenders and advertising services. The company has also ventured into home buying and selling through Zillow Offers, where it purchases homes directly from sellers, makes necessary renovations, and then resells them. Partnerships with real estate professionals and technology-driven solutions further bolster its revenue streams.
Zillow Group Class C Financial Statement Overview
Summary
Overall, Zillow exhibits solid revenue growth and effective cash flow management, but faces challenges in achieving profitability and improving returns on equity. The company's strong equity base provides a buffer against financial distress, yet operational inefficiencies need addressing to enhance long-term financial performance.Income Statement
Zillow's revenue has shown a moderate growth trajectory, increasing from $1.945 billion in 2023 to $2.236 billion in 2024. Gross Profit Margin stands strong at 76.4% for 2024, reflecting effective cost management. However, the company struggles with profitability, as evidenced by negative Net Profit Margin and EBIT Margin, indicating ongoing operational challenges.65
Positive
Balance Sheet
Zillow's balance sheet reflects a robust equity position with a high Equity Ratio of 83.2%, suggesting financial stability and low leverage with a Debt-to-Equity Ratio of 0.11. However, the negative Net Income impacts the Return on Equity, which remains negative, highlighting the need for operational improvements.70
Positive
Cash Flow
Zillow demonstrates healthy cash flow management with positive Free Cash Flow of $285 million in 2024 and an improvement in Operating Cash Flow. The Free Cash Flow to Net Income Ratio indicates strong cash generation relative to net losses, though the firm must address its consistent negative net income to enhance overall cash flow sustainability.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.24B | 1.95B | 1.96B | 8.15B | 3.34B | Gross Profit |
| 1.71B | 1.52B | 1.59B | 1.75B | 1.58B | EBIT |
| -197.00M | -270.00M | -26.00M | -246.21M | 60.94M | EBITDA |
| 179.00M | 125.00M | 123.00M | 370.00M | 119.96M | Net Income Common Stockholders |
| -112.00M | -158.00M | -88.00M | -527.78M | -162.12M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.86B | 2.81B | 3.36B | 3.13B | 3.92B | Total Assets |
| 5.83B | 6.65B | 6.56B | 10.70B | 7.49B | Total Debt |
| 515.00M | 1.83B | 1.87B | 5.01B | 2.52B | Net Debt |
| -567.00M | 340.00M | 401.00M | 2.40B | 816.63M | Total Liabilities |
| 981.00M | 2.13B | 2.08B | 5.35B | 2.74B | Stockholders Equity |
| 4.85B | 4.53B | 4.48B | 5.34B | 4.74B |
| Cash Flow | Free Cash Flow | |||
| 285.00M | 189.00M | 4.36B | -3.28B | 315.68M | Operating Cash Flow |
| 428.00M | 354.00M | 4.50B | -3.18B | 424.20M | Investing Cash Flow |
| 395.00M | 25.00M | -1.53B | 1.09B | -1.04B | Financing Cash Flow |
| -1.23B | -352.00M | -4.34B | 3.15B | 1.16B |
Zillow Group Class C Technical Analysis
Negative
74.43
Price Trends
78.18
Negative
74.86
Negative
63.04
Positive
Market Momentum
-1.34
Positive
38.93
Neutral
24.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For Z, the sentiment is Negative. The current price of 74.43 is below the 20-day moving average (MA) of 80.10, below the 50-day MA of 78.18, and above the 200-day MA of 63.04, indicating a neutral trend. The MACD of -1.34 indicates Positive momentum. The RSI at 38.93 is Neutral, neither overbought nor oversold. The STOCH value of 24.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $2.60B | 24.93 | 3.83% | ― | 8.31% | -49.90% | |
63 Neutral | $1.53B | ― | -10.38% | 2.05% | 6.69% | -137.52% | |
60 Neutral | $17.96B | ― | -2.31% | ― | 14.96% | 29.56% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
58 Neutral | $17.96B | ― | -2.31% | ― | 14.96% | 29.56% | |
45 Neutral | $802.57M | ― | 199.35% | ― | -4.16% | -17.19% | |
44 Neutral | $875.46M | ― | -54.98% | ― | -25.81% | -34.43% |
* Communication Services Sector Average
Performance Comparison
Z
Zillow Group Class C
74.43
18.22
32.41%
ZG
Zillow Group Class A
72.79
18.76
34.72%
EXPI
eXp World Holdings
9.95
-2.07
-17.22%
RDFN
Redfin
6.35
-0.06
-0.94%
REZI
Resideo Technologies
17.60
-4.74
-21.22%
OPEN
Opendoor Technologies
1.24
-1.71
-57.97%
Zillow Group Class C Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -13.77% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
Zillow demonstrated robust revenue growth and strategic execution in both For Sale and Rentals segments, despite challenges in the broader housing market. The company reported strong performance in key areas such as Enhanced Markets and mortgage revenue. However, ongoing challenges in the housing market and a GAAP net loss in Q4 present concerns.Highlights
Record Revenue Growth
Zillow reported total Q4 revenue of $554 million, up 17% year-over-year, and full year 2024 revenue growth of 15% to $2.2 billion, despite a challenging housing market.
Strong Performance in Rentals
Rentals segment finished strong in Q4 with revenue up 25% year-over-year, increasing the number of multifamily properties on Zillow to 50,000, up from 37,000 at the end of 2023.
Enhanced Market Strategy Success
Enhanced Markets covered 21% of all connections in Q4 2024, and Zillow expects to increase their share of connections to more than 35% by the end of 2025.
Mortgage Revenue Growth
Mortgages revenue grew 86% year-over-year to $41 million in Q4, with purchase loan origination volume growing 90% year-over-year.
Positive GAAP Net Income Expected in 2025
Zillow expects to achieve positive GAAP net income for the full year 2025, driven by ongoing revenue growth and cost management.
Lowlights
Challenged Housing Market
Despite Zillow's growth, the broader residential real estate market saw only a 6% total transaction value growth for the year, indicating ongoing challenges in the housing sector.
GAAP Net Loss in Q4
On a GAAP basis, Zillow reported a net loss of $52 million in Q4, equating to 9% of their revenue.
Convertible Debt Settlement Impact
The settlement of Zillow's 2026 convertible debt in December required aggregate cash payments of $499 million, impacting the company's cash reserves.
Company Guidance
During Zillow Group's fourth quarter 2024 earnings call, the company provided guidance indicating strong performance and promising growth trajectories. Key metrics from the call included a 17% year-over-year increase in Q4 revenue to $554 million, surpassing their outlook range, and a full-year revenue growth of 15% to $2.2 billion. Zillow's adjusted EBITDA margin expanded by 200 basis points, setting a robust foundation for 2025 with expectations for low to mid-teens revenue growth and further margin expansion. The company is on track to achieve a 6% share of customer transactions by the end of the year and is targeting positive GAAP net income for 2025. Zillow's strategy includes expanding its Enhanced Markets and integrating services like Premier Agent and Zillow Home Loans, aiming for a clear path to $5 billion in revenue with a 45% EBITDA margin in a normalized housing market. The company also highlighted significant growth in its Rentals segment, with a 25% year-over-year increase in Q4 revenue and plans to expand rental property listings through a strategic partnership with Redfin.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.