Zillow Group, Inc. Class A Fundamental Analysis (NASDAQ: ZG)
Zillow Group, Inc. Class A Fundamental Analysis (NASDAQ: ZG)
Zillow Group, Inc. Class A (NASDAQ: ZG) shows moderate financial fundamentals with a PE ratio of -58.39, profit margin of -3.95%, and ROE of -2.54%. The company generates $2.9B in annual revenue with strong year-over-year growth of 15.52%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 39.8/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ZG's fundamental strength across five key dimensions:
Efficiency Score
WeakZG struggles to generate sufficient returns from assets.
Valuation Score
ExcellentZG trades at attractive valuation levels.
Growth Score
ModerateZG shows steady but slowing expansion.
Financial Health Score
ExcellentZG maintains a strong and stable balance sheet.
Profitability Score
WeakZG struggles to sustain strong margins.
Key Financial Metrics
Is ZG Expensive or Cheap?
P/E Ratio
ZG trades at -58.39 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, ZG's PEG of 0.04 indicates potential undervaluation.
Price to Book
The market values Zillow Group, Inc. Class A at 1.58 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 38.67 times EBITDA. This signals the market has high growth expectations.
How Well Does ZG Make Money?
Net Profit Margin
For every $100 in sales, Zillow Group, Inc. Class A keeps $-3.95 as profit after all expenses.
Operating Margin
Core operations generate -5.11 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-2.54 in profit for every $100 of shareholder equity.
ROA
Zillow Group, Inc. Class A generates $-2.12 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Zillow Group, Inc. Class A produces operating cash flow of $445.43M, showing steady but balanced cash generation.
Free Cash Flow
Zillow Group, Inc. Class A generates strong free cash flow of $320.31M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.42 in free cash annually.
FCF Yield
ZG converts 4.79% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
-58.39
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.04
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.58
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.34
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.11
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.76
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.03
vs 25 benchmark
ROA
Return on assets percentage
-0.02
vs 25 benchmark
ROCE
Return on capital employed
-0.03
vs 25 benchmark
How ZG Stacks Against Its Sector Peers
| Metric | ZG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | -58.39 | 18.71 | Better (Cheaper) |
| ROE | -2.54% | 905.00% | Weak |
| Net Margin | -3.95% | 1010.00% | Weak |
| Debt/Equity | 0.11 | -0.06 (disorted) | Distorted |
| Current Ratio | 1.76 | 1.82 | Neutral |
| ROA | -2.12% | 295.00% | Weak |
ZG outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Zillow Group, Inc. Class A's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
47.16%
Industry Style: Growth, Technology, Streaming
High GrowthEPS CAGR
113.14%
Industry Style: Growth, Technology, Streaming
High GrowthFCF CAGR
-19.73%
Industry Style: Growth, Technology, Streaming
Declining