Value
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 0.0 |
| P/S | 8.6 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 9.1 |
| PEG | 7.4 |
| Analyst target | 7.5 |
- ▸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. How we score · Editorial policy
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroRISK_OFF
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.
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. | ↑Improving |
| 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. | ↓Deteriorating |
| 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. | ↑Improving |
| 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.
↑ImprovingMomentum 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.
↓DeterioratingBear 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.
↑ImprovingEarnings
- 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.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.4 |
| ROA | 0.6 |
| Gross margin | 10.0 |
| Op margin | 1.9 |
| Net margin | 1.0 |
| Current ratio | 6.8 |
| FCF quality | 10.0 |
| Moat | 7.9 |
| Rule of 40 | 5.5 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 444% FCF/NI
- ▸Wide economic moat
- ▸Strong Piotroski F-Score: 9/9
Growth
7.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 7.0 |
Momentum
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 4.3 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -13.6%/30d — confirmed downtrend
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.6 |
| Analyst rating | 5.0 |
| Price target | 8.8 |
- ▸Analyst upside: 34%
Insider
5.0/10data confidence 50%Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.6 |
| quality rank | 2.7 |
| growth rank | 4.5 |
Technical
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.1 |
| support resistance | 4.8 |
| 52w position | 0.0 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.3 |
| days to cover | 7.8 |
| volatility | 0.2 |
| put call | 0.0 |
| implied vol | 0.3 |
| max pain risk | 7.0 |
| beta | 3.3 |
| debt equity | 9.5 |
| news risk | 2.0 |
- ▸Elevated put/call: 3.26
- ▸High IV: 78%
- ▸Multi-category risk: regulatory, legal
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 5.6 |
| news activity | 8.0 |
- ▸Earnings in 6 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:4.8>=4.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- ASYMMETRY:1.2<1.5@spot
- DEATH_CROSS:HARD_BLOCK
- EARNINGS_PROXIMITY:6d<=7d
Warning (1)
- MOMENTUM:4.8<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
1.23
Upside
+16.4%
Downside
13.3%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 56
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -62% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 4.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 7.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:1.2<1.5@spot, DEATH_CROSS:HARD_BLOCK, EARNINGS_PROXIMITY:6d<=7d) reinforce the read. Current asymmetry R:R is 1.23 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 7.0, Sentiment at 6.0, and Value at 5.9; the weakest are Technical at 3.0, Risk (lower is worse) at 3.9, and Peer rank at 4.0. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 1.23 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.