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Zillow Group Inc Class A (ZG)
NASDAQ:ZG
Top Page
Zillow Group Class A
(NASDAQ:ZG)
55Neutral
Positive Factors
Growth and Market Share
Zillow is well-positioned for durable growth and share gains across its various business segments, particularly as industry conditions improve.
Strategic Positioning
Analyst recommendation for Zillow Group Inc Class A stock is influenced by its strategic positioning in the real estate technology sector.
Negative Factors
Earnings and Market Expectations
Zillow 1Q guide was slightly below Street expectations, amid ongoing macro uncertainty and potential inflation resurgence.
Interest Rates and Affordability
The outlook for interest rates remains highly uncertain, with affordability near historic lows, which could constrain transaction activity.
Zillow Group Class A (ZG) vs. S&P 500 (SPY)
Market Cap
$16.07B
Dividend YieldN/A
Average Volume (3M)658.35K
Price to Earnings (P/E)―
Beta (1Y)1.59
Revenue Growth14.96%
EPS Growth29.56%
CountryUS
Employees6,856
SectorCommunication Services
Sector Strength73
IndustryInternet Content & Information
Share Statistics
EPS (TTM)-0.48
Shares Outstanding54,333,290
10 Day Avg. Volume483,404
30 Day Avg. Volume658,346
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)7.57
Price to Cash Flow (P/CF)34.70
P/FCF Ratio47.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$86.65Price Target Upside32.65% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
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 Internet, Media & Technology (IMT) segment, which includes services for real estate agents, rental professionals, and mortgage lenders. The company earns money through advertising and subscription services offered to real estate professionals who list properties on its platforms. Additionally, Zillow receives revenue from its mortgage segment by providing mortgage origination services and selling leads to mortgage lenders. Zillow Group also has a small portion of its revenue coming from other services such as title and escrow services. Strategic partnerships with various real estate and financial services companies further enhance its revenue streams.
Zillow Group Class A Financial Statement Overview
Summary
Zillow Group exhibits a mixed financial profile with strong asset backing and improving cash flow metrics. However, the company faces persistent challenges in achieving profitability, with negative net profit and EBIT margins, and volatile revenue trends.Income Statement
Zillow Group has displayed a volatile revenue trend, with a recent revenue growth of 14.95% from 2023 to 2024. However, the company is struggling with profitability, evidenced by a negative net profit margin of -5.01% and negative EBIT margin of -8.81% in 2024, indicating operational challenges.45
Neutral
Balance Sheet
The balance sheet is relatively strong with a low debt-to-equity ratio of 0.11, indicating conservative leveraging. The equity ratio stands at 83.18%, showing strong asset backing by shareholders. However, the company has shown losses in past years, impacting return on equity.65
Positive
Cash Flow
Cash flow analysis shows a positive operating cash flow to net income ratio of 3.82, suggesting healthy cash conversion despite net losses. Free cash flow has also grown, enhancing liquidity. However, previous volatility in cash flows poses potential risk.60
Neutral
| 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 A Technical Analysis
Negative
65.32
Price Trends
73.99
Negative
74.41
Negative
64.08
Positive
Market Momentum
-1.58
Negative
42.65
Neutral
26.70
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 65.32 is below the 20-day moving average (MA) of 68.77, below the 50-day MA of 73.99, and above the 200-day MA of 64.08, indicating a neutral trend. The MACD of -1.58 indicates Negative momentum. The RSI at 42.65 is Neutral, neither overbought nor oversold. The STOCH value of 26.70 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 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 (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $2.31B | 22.12 | 3.83% | ― | 8.31% | -49.90% | |
63 Neutral | $1.44B | ― | -7.50% | 2.11% | 6.69% | -137.52% | |
58 Neutral | $25.21B | 3.07 | -13.86% | 4.29% | 2.47% | -43.03% | |
58 Neutral | $1.31B | ― | 199.35% | ― | -4.16% | -17.19% | |
55 Neutral | $16.07B | ― | -2.39% | ― | 14.96% | 29.56% | |
49 Neutral | $586.27M | ― | 32.94% | ― | 9.32% | 25.94% | |
44 Neutral | $697.83M | ― | -46.67% | ― | -25.81% | -34.43% |
* Communication Services Sector Average
Performance Comparison
ZG
Zillow Group Class A
65.32
18.71
40.14%
EXPI
eXp World Holdings
9.48
-0.45
-4.53%
RDFN
Redfin
10.20
4.01
64.78%
REZI
Resideo Technologies
15.62
-6.37
-28.97%
REAL
RealReal
5.29
1.70
47.35%
OPEN
Opendoor Technologies
0.99
-1.70
-63.20%
Zillow Group Class A Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -22.09% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
Zillow Group demonstrated strong revenue growth and strategic execution despite a challenging housing market. Their investments in the Rentals and Mortgage segments are yielding positive results, and their Enhanced Market strategy is driving future growth potential. However, the company faced a GAAP net loss in Q4 and continues to navigate a subdued housing market.Highlights
Record Revenue Growth
Zillow Group reported total Q4 2024 revenue of $554 million, up 17% year-over-year, exceeding their outlook range. Full-year 2024 revenue grew by 15% to $2.2 billion, despite a challenging housing market.
Strong Rentals Segment Performance
Rentals revenue grew 25% year-over-year in Q4 2024 to $116 million, driven primarily by multifamily revenue, which grew 41% year-over-year. The number of multifamily properties on Zillow increased to 50,000 from 37,000 at the end of 2023.
Successful Mortgage Growth
Mortgages revenue grew 86% year-over-year in Q4 to $41 million, with purchase loan origination volume growing 90% year-over-year to $923 million.
EBITDA Margin Expansion
Zillow Group achieved an EBITDA margin expansion of 200 basis points to 22% for full-year 2024, driven by disciplined cost management and strategic investments.
Enhanced Market Strategy
Enhanced Markets covered 21% of all connections in Q4 2024, with an expectation to increase to 35% by the end of 2025, and a long-term target of 75% of all transactions.
Lowlights
Net Loss in Q4
Zillow Group reported a GAAP net loss of $52 million in Q4, representing 9% of their revenue.
Challenging Housing Market
The housing market was persistently challenged, with only 6% total transaction value growth for the year and expectations of a subdued market in 2025.
Limited New Listings
Despite improvements, new listings remained down from pre-pandemic levels, reflecting ongoing challenges in housing market supply.
Company Guidance
During Zillow Group's Fourth Quarter 2024 Financial Results Call, several key metrics and guidance for future performance were highlighted. Zillow reported Q4 revenue of $554 million, marking a 17% year-over-year increase, and achieved double-digit revenue growth for the full year, totaling $2.2 billion, despite a challenging housing market. The company met its target for expanding its EBITDA margin by 200 basis points in 2024. For 2025, Zillow expects to maintain momentum with anticipated low to mid-teens revenue growth and plans to expand its Enhanced Market experience from 21% to over 35% by year-end. The company also forecasts positive GAAP net income for the full year 2025 and envisions a path to $5 billion in revenue and a 45% EBITDA margin in a normalized housing market. Additionally, Zillow's rental segment showed strong performance with Q4 revenue up 25% year-over-year, and the company aims to continue growing its presence in the rental market with a strategic partnership with Redfin.Zillow Group Class A Corporate Events
Executive/Board Changes
Zillow Group Announces Key Executive Leadership Changes
Neutral
Nov 14, 2024
Zillow Group, Inc. has appointed Jun Choo as the new Chief Operating Officer, enhancing his compensation and providing contractual indemnification. Concurrently, Susan Daimler steps down as President, with her departure agreement ensuring continued salary, benefits, and vesting of stock options during a transition period. These executive changes will lead to an additional $10.8 million in share-based compensation expenses for the company’s financials by the end of 2024.
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.