ZG Zillow Group Inc

Zillow Group Inc (ZG) is an individual stock. The analysis below presents key financial metrics for the company, covering profitability, capital efficiency, valuation, margins, and growth.

Assessing the quality of returns on invested capital, ROIC is -0.72%, WACC is 16.46%, and the economic spread is -17.18%. On balance, the company is not clearing their capital cost hurdle, meaning reinvestment may be diluting rather than compounding value. Supporting metrics show ROE at 0.47% and ROA at 0.03%, a combination that helps frame whether profitability strength is broad enough to hold through different market conditions. Taken together, the return profile suggests a company that likely needs operating improvement before returns quality can be considered durable.

The market currently prices the company at trailing P/E of 451.56, forward P/E of 18.33, PEG of 4.16. Trailing P/E is materially above forward P/E — a spread that typically signals expected earnings growth and a company that is cheaper on a forward basis than it first appears. The PEG ratio signals premium pricing — the company's earnings growth expectations, while present, do not fully explain the current multiple on a purely quantitative basis. At 3.13, the aggregate current ratio reflects strong balance sheet liquidity across the company. Valuation and liquidity together frame a company where the price paid today is a reasonable bet on earnings delivery — but not a margin-of-safety purchase at current levels.

Looking at margins from gross to free cash flow, gross margin sits at 74.14%, operating margin at -1.24%, and free cash flow margin at 6.50%. The gross margin here is a standout, pointing to businesses with durable unit economics and limited commodity exposure. Near-zero or negative operating margins point to the company where growth investment is currently prioritized over near-term profitability. The company's cash conversion is middle-of-the-road — sufficient for operational needs, but leaving limited surplus for discretionary allocation. Margins indicate a company that is operating effectively in some areas while still showing efficiency gaps in others.

Projected 12-month EPS growth of 2362.9% adds a powerful forward signal — analyst consensus expects earnings to accelerate materially, which, if delivered, could make current multiples look increasingly modest. Turning to growth and analyst expectations, TTM revenue growth of 18.05% pointing to stable operational progress without outsized acceleration, while the estimated 12-month price change of 82.55%, where analyst targets indicate a strong re-rating opportunity from current prices. The distinction matters: revenue growth tells you what the company are doing, price targets tell you what analysts think the market will pay for it. Ultimately, the alignment between revenue momentum and analyst targets will depend on execution quality and the broader rate and sentiment environment. The estimated 12-month price change is based on analyst consensus price target estimates, sourced from publicly available data, and should not be interpreted as a reliable prediction of future performance.

The fundamental picture is not broken, but neither is it clearly compelling — a hold posture reflects the absence of an obvious catalyst for re-rating in either direction.

The analysis above draws from quantitative data only and does not constitute personalized financial advice. Investors should conduct independent research and consider professional guidance before acting on any information presented here.