Value
6.8/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 0.0 |
| P/S | 8.4 |
| Fwd P/E | 9.1 |
| PEG | 7.4 |
| Analyst target | 9.0 |
- ▸Forward P/E: 11.1x
- ▸PEG: 0.93
Z · Why this verdict
Why Zillow Group (Z) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.5/10
ConfidenceHIGH
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Zillow's price has fallen into a death-cross pattern with the 200-day moving average trending downward at -10.2% per 30 days, RSI at 32 approaching oversold territory, and a declining on-balance volume indicator — confirming an active downtrend. Momentum breakdown | The 200-day moving average slope recovers to flat or positive within 9 months, and RSI rises above 45, indicating trend stabilization. | →Stable |
| CounterA confirmed death cross with a -10.2% monthly MA slope is among the stronger technical breakdown signals; the stock may continue falling well past current levels before the trend exhausts itself. | ||
Residential revenue accounts for 66% of Zillow's total revenue, creating a high product-concentration risk where any slowdown in the residential real estate market directly impairs the majority of the company's income. Bear case | Non-residential revenue streams grow to represent more than 40% of total revenue within 12 months, reducing reliance on residential transactions. | →Stable |
| CounterReal estate market conditions are cyclically sensitive; rising mortgage rates or a housing slowdown could compress the residential revenue base with limited offsetting contribution from other segments. | ||
Zillow converts 468% of net income into free cash flow and holds a Piotroski F-Score of 8/9, indicating that the underlying business generates significantly more cash than accounting earnings reflect — a structural quality advantage. Quality breakdown | Free cash flow generation remains above 300% of net income over the next 4 quarters, confirming the cash conversion advantage is durable. | →Stable |
| CounterHigh free-cash-flow relative to net income may reflect aggressive depreciation or deferred capital spending; if reinvestment needs increase, the conversion rate could normalize sharply downward. | ||
Analysts target a 63% price gain to $52.63, but Zillow has missed earnings in 2 of the last 4 quarters with an average EPS surprise of -5.2%, creating a gap between analyst optimism and recent execution. Earnings | EPS surprise turns positive in at least 3 of the next 4 quarters, and average surprise rises above 5%, closing the gap between analyst targets and actual results. | →Stable |
| CounterWith two misses in four quarters and an average surprise of -5.2%, the company may be struggling to meet expectations set by analysts who are anchored to a recovery story that hasn't materialized. | ||
Zillow's price has fallen into a death-cross pattern with the 200-day moving average trending downward at -10.2% per 30 days, RSI at 32 approaching oversold territory, and a declining on-balance volume indicator — confirming an active downtrend.
→StableMomentum breakdown
- Expectation
- The 200-day moving average slope recovers to flat or positive within 9 months, and RSI rises above 45, indicating trend stabilization.
CounterA confirmed death cross with a -10.2% monthly MA slope is among the stronger technical breakdown signals; the stock may continue falling well past current levels before the trend exhausts itself.
Residential revenue accounts for 66% of Zillow's total revenue, creating a high product-concentration risk where any slowdown in the residential real estate market directly impairs the majority of the company's income.
→StableBear case
- Expectation
- Non-residential revenue streams grow to represent more than 40% of total revenue within 12 months, reducing reliance on residential transactions.
CounterReal estate market conditions are cyclically sensitive; rising mortgage rates or a housing slowdown could compress the residential revenue base with limited offsetting contribution from other segments.
Zillow converts 468% of net income into free cash flow and holds a Piotroski F-Score of 8/9, indicating that the underlying business generates significantly more cash than accounting earnings reflect — a structural quality advantage.
→StableQuality breakdown
- Expectation
- Free cash flow generation remains above 300% of net income over the next 4 quarters, confirming the cash conversion advantage is durable.
CounterHigh free-cash-flow relative to net income may reflect aggressive depreciation or deferred capital spending; if reinvestment needs increase, the conversion rate could normalize sharply downward.
Analysts target a 63% price gain to $52.63, but Zillow has missed earnings in 2 of the last 4 quarters with an average EPS surprise of -5.2%, creating a gap between analyst optimism and recent execution.
→StableEarnings
- Expectation
- EPS surprise turns positive in at least 3 of the next 4 quarters, and average surprise rises above 5%, closing the gap between analyst targets and actual results.
CounterWith two misses in four quarters and an average surprise of -5.2%, the company may be struggling to meet expectations set by analysts who are anchored to a recovery story that hasn't materialized.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Zillow Group carries deep analyst upside of 63% and exceptional free cash flow conversion, but a confirmed death-cross technical breakdown with RSI at 32 and two recent earnings misses signal that the near-term path to realizing that upside is uncertain.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.4 |
| ROA | 0.1 |
| Gross margin | 10.0 |
| Op margin | 2.0 |
| Net margin | 1.1 |
| Current ratio | 7.9 |
| FCF quality | 10.0 |
| Moat | 6.4 |
| Rule of 40 | 5.5 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 468% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
7.1/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 7.1 |
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 2.1 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -12.0%/30d — confirmed downtrend
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 9.9 |
| erm sentiment | 5.4 |
- ▸Analyst upside: 81%
Insider
5.0/10data confidence 50%Peer rank
2.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.1 |
| quality rank | 2.4 |
| growth rank | 7.7 |
Technical
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.8 |
| support resistance | 4.6 |
| 52w position | 0.0 |
| gap | 5.0 |
Risk (lower is worse)
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.3 |
| days to cover | 7.9 |
| volatility | 0.3 |
| put call | 8.8 |
| implied vol | 0.9 |
| max pain risk | 7.0 |
| beta | 3.5 |
| debt equity | 0.0 |
- ▸High IV: 75%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 2.8 |
- ▸Earnings concerns: 1B/2M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (8)
- MOMENTUM:6.1>=5.5
- ASYMMETRY:4.6>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- DEATH_CROSS:momentum=6.1>=5.0 recovering
Reward-to-Risk
4.57
Upside
+57.4%
Downside
12.6%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 53
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -64% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 4.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 7.1) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 4.57 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 7.1, Value at 6.8, and Sentiment at 6.7; the weakest are Peer rank at 2.8, Technical at 3.3, and Catalyst at 3.5. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 4.57 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Death Cross Technical Breakdown
Trip ifPrice drops below $28, falling more than 13% below the current $32.36, with the 200-day MA slope declining beyond -15% per 30 days.
- P2Residential Revenue Concentration
Trip ifResidential revenue falls below 60% of total revenue but only if absolute revenue also declines by more than 5% year-over-year.
- P3Exceptional Free Cash Flow Conversion
Trip ifFree cash flow conversion drops below 150% of net income for 2 consecutive quarters.
- P4Analyst Upside Vs Earnings Misses
Trip ifEPS surprise falls below -10% in at least 2 of the next 4 quarters, or analyst price target declines below $40.