Z Stock Risk & Deep Value Analysis
Zillow Group Inc
Communication Services • Internet Content & Information
DVR Score
out of 10
What You Need to Know About Z Stock
We analyzed Zillow Group Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran Z through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate. Here's what we found.
Z Risk Analysis & Red Flags
What Could Go Wrong
The biggest risk for Zillow is a significant and prolonged downturn in the U.S. housing market, which could stifle transaction volumes and reduce demand for its core For Sale and Mortgage services, potentially impacting its overall revenue growth rate, which was 18% in Q1 2026, and delaying its path to its 'super app' potential.
Risk Matrix
Overall
Moderate
Financial
Low
Market
Medium
Competitive
Medium
Execution
Medium
Regulatory
Low
Red Flags
- ⚠
High trailing P/E ratio of 145.76, indicating significant future growth is already priced into the current stock price.
- ⚠
Competition from well-funded rivals like CoStar's Homes.com or Realtor.com intensifying, potentially limiting Zillow's market share gains in key service segments.
- ⚠
While not tied to specific issues, 'incremental legal expenses' noted on the Q1 call could represent an ongoing drag on profitability if they escalate.
Upcoming Risk Events
- 📅
Q2 2026 earnings miss (estimated August 5, 2026): If Q2 revenue guidance of $750M-$765M or Adjusted EBITDA of $150M-$165M is missed, indicating a slowdown in service pivot.
- 📅
Significant slowdown in U.S. housing market activity (ongoing 2026-2027): A sustained 15%+ decline in home sales volume nationally could negatively impact Zillow's For Sale segment revenue.
When to Reconsider
- 🚪
Exit if quarterly revenue growth decelerates below 10% year-over-year for two consecutive quarters.
- 🚪
Sell if Adjusted Free Cash Flow turns consistently negative over two consecutive quarters.
- 🚪
Exit if Zillow's market share in the online rental listings market falls by more than 5 percentage points, signaling a weakening moat.
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What Does Zillow Group Inc (Z) Do?
Market Cap
$8.03B
Sector
Communication Services
Industry
Internet Content & Information
Employees
7,031
Zillow Group, Inc. operates real estate brands in mobile applications and Websites in the United States. The company offers premier agent and rentals marketplaces, new construction marketplaces, advertising, display advertising, and business technology solutions, as well as dotloop, a real estate transaction management SaaS solution. It also provides mortgage originations and the sale of mortgages, and advertising to mortgage lenders and other mortgage professionals; and title and escrow services. In addition, the company's brand portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, and Out East; and a suite of marketing software and technology solutions for the real estate industry, including ShowingTime+, Spruce, and Follow Up Boss. Zillow Group, Inc. was incorporated in 2004 and is headquartered in Seattle, Washington.
Visit Zillow Group Inc WebsiteInvestment Thesis
If Zillow successfully executes its 'housing super app' vision, achieving sustained 20%+ revenue growth from high-margin service segments like Mortgages and Rentals, and deepening user engagement through AI-powered tools, then its market capitalization could reach $80B-$100B (10x potential) within 3-5 years, driven by a re-rating to higher revenue and EBITDA multiples akin to an integrated tech platform. This is bullish because the market is still partially valuing Zillow on legacy metrics, underestimating the long-term earnings power and synergistic effects of its diversified service offerings.
Is Z Stock Undervalued?
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Z Price Targets & Strategy
12-Month Target
$70.00
Bull Case
$85.00
Bear Case
$45.00
Valuation Basis
Based on 35x forward P/E applied to estimated $2.00 FY26 adjusted EPS = $70.00
Entry Strategy
Dollar-cost average between $35-$40, leveraging any dips towards the $35 support zone.
Exit Strategy
Take 30% profit at $65, 30% more at $80, and hold the remainder for long-term growth; Stop loss at $30 to limit downside.
Portfolio Allocation
5% for moderate risk tolerance, up to 10% for aggressive investors.
Price Targets & Strategy
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Is Z Financially Healthy?
Valuation
P/E Ratio
131.57
Forward P/E
20.58
EV/EBITDA
71.39
PEG Ratio
2.04
Price/Book
2.24
Price/Sales
4.26
Profitability
Gross Margin
73.34%
Operating Margin
0.41%
Net Margin
2.27%
Return on Equity
1.28%
Revenue Growth
16.83%
EPS
$0.25
Balance Sheet
Current Ratio
3.13
Quick Ratio
3.04
Debt/Equity
0.07
Total Debt
$457.00M
Cash & Equivalents
$1.30B
Cash Flow
Operating Cash Flow
$368.00M
Free Cash Flow
$235.00M
EBITDA
$307.00M
Other
Beta (Volatility)
1.99
Does Z Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Expanding
Moat Sources
3 Identified
Zillow's moat is durable due to its strong brand equity, which makes it the first stop for many homebuyers and renters, creating powerful network effects for agents and lenders. Its vast dataset and AI tools also serve as an intangible asset, making it difficult for new entrants to replicate its search and discovery experience.
Moat Erosion Risks
- •Aggressive platform investments and marketing from competitors like CoStar's Homes.com could chip away at Zillow's user engagement and agent loyalty.
- •Regulatory changes regarding data privacy or real estate commission structures could disrupt Zillow's existing revenue streams or business model.
Z Competitive Moat Analysis
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Z Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral to Bullish, driven by recent strong earnings and the potential of the 'super app' vision.
Institutional Sentiment
Positive, with analyst consensus at 'Buy' and multiple firms maintaining 'Strong Buy' ratings despite some recent target adjustments.
Insider Activity (Form 4)
Zillow Group repurchased 13.5 million shares for $626 million in Q1 2026, indicating management's confidence in the company's valuation; no individual insider Form 4 activity was provided in the last 90 days.
Options Flow
Normal options activity; no specific unusual put/call ratio or large block trades were indicated in the provided data.
Earnings Intelligence
Next Earnings
Estimated August 5, 2026
Surprise Probability
Medium
Historical Earnings Pattern
Zillow's stock often exhibits positive price action on earnings beats, especially when accompanied by strong guidance or positive updates on the 'super app' strategy.
Key Metrics to Watch
Competitive Position
Top Competitor
Realtor.com/Move
Market Share Trend
Gaining market share in high-growth segments like Mortgages and Rentals, while maintaining a strong dominant position in online listings.
Valuation vs Peers
Trading at a premium to traditional real estate brokerage peers (e.g., Redfin) on trailing P/E, but competitive with high-growth technology platforms in its market segment on a forward growth basis.
Competitive Advantages
- •Dominant brand recognition and top-of-mind consumer awareness.
- •Robust network effects due to its vast user base and comprehensive property listings.
- •Extensive proprietary real estate data and AI capabilities.
Market Intelligence
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What Could Drive Z Stock Higher?
Near-Term (0-6 months)
- •Q2 2026 earnings report (estimated August 5, 2026): Positive surprise on revenue or Adjusted EBITDA guidance (Q2 revenue guided $750M-$765M) could re-rate the stock.
- •Launch of new AI-powered agent tools in 'enhanced markets' (ongoing throughout 2026): If Zillow reports 15%+ increase in Premier Agent conversion rates or 10%+ increase in agent spend within these markets.
Medium-Term (6-18 months)
- •Accelerated market share capture in mortgage originations and servicing (next 6-18 months): If Zillow's mortgage segment revenue grows >40% YoY for two consecutive quarters, signaling deeper integration and adoption of its financing solutions.
- •Expansion of 'housing super app' features into new lifecycle stages (e.g., renovations, property management, 2027-2028): Successful pilot programs leading to new revenue streams or 10%+ increase in user engagement for these services.
Long-Term (18+ months)
- •Full realization of the 'housing super app' driving 3-5x increase in average revenue per user (ARPU) by 2030: If ARPU approaches $100-$150 annually, supported by cross-selling high-margin services, Zillow could achieve a $80B+ market cap.
- •Geographic expansion or strategic acquisition into adjacent property tech markets (2028-2030): If Zillow successfully expands into international markets or acquires a complementary proptech platform, adding an additional $1B+ in annualized revenue.
Catalysts & Growth Drivers
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What's the Bull Case for Z?
- ✓
Watch quarterly Mortgages segment revenue growth: consistently above 40% YoY signals strong execution on this high-margin vertical.
- ✓
Monitor Rentals segment revenue growth: sustained growth above 35% YoY indicates success in a key, expanding market.
- ✓
Track Adjusted EBITDA margin: continued expansion beyond Q1's 26% margin suggests operational leverage from the super app strategy.
Bull Case Analysis
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Competing with Z
See how Zillow Group Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Zillow Group Inc Z | $8.0B | 8.6 | 131.6 | $2.6B | 2.3% | 16.8% | |
Comcast Corp CMCSA | $84.4B | 2.0 | 4.5 | — | 15.0% | 1.4% | Compare → |
Walt Disney Co DIS | $181.9B | 2.8 | 16.2 | $25.2B | 11.5% | 3.4% | Compare → |
Alphabet Inc GOOGL | $4.5T | 1.0 | 27.9 | — | 37.9% | 17.4% | Compare → |
Meta Platforms Inc META | $1.6T | 5.8 | 22.6 | $201.0B | 32.8% | 26.2% | Compare → |
Netflix Inc NFLX | $327.9B | 6.0 | 24.5 | — | 28.5% | 16.7% | Compare → |
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How Zillow Group Inc Makes Money
Zillow Group operates a comprehensive online real estate marketplace where it connects buyers, sellers, renters, and borrowers with real estate professionals and services. It generates revenue primarily through advertising services for real estate agents (Premier Agent), mortgage lenders, and rental property managers who pay to be featured on its popular platforms. Additionally, Zillow earns revenue from its own mortgage originations, title and escrow services, and other integrated tools designed to facilitate every step of the home transaction lifecycle, aiming to be a 'housing super app' for consumers.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Zillow Group Inc (Z)?
As of June 2, 2026, Zillow Group Inc has a DVR Score of 8.6 out of 10, placing it in the "Hidden Gem" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Zillow Group Inc?
Zillow Group Inc's market capitalization is approximately $8.0B. The company operates in the Communication Services sector within the Internet Content & Information industry.
What ticker symbol does Zillow Group Inc use?
Z is the ticker symbol for Zillow Group Inc. The company trades on the NMS.
What is the risk level for Z stock?
Our analysis rates Zillow Group Inc's overall risk as Moderate. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of Z?
Zillow Group Inc currently has a price-to-earnings (P/E) ratio of 131.6. This is above the market average, suggesting the stock may be priced for high growth expectations.
Is Zillow Group Inc's revenue growing?
Zillow Group Inc has reported revenue growth of 16.8%. The company is showing strong top-line momentum.
Is Z stock profitable?
Zillow Group Inc has a profit margin of 2.3%. The company is profitable but margins are modest.
How often is the Z DVR analysis updated?
Our AI-powered analysis of Zillow Group Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on June 2, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for Z (Zillow Group Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.