Zillow Group (Z, Financial) experienced a notable rise in its stock price, increasing by 1.65% to reach $73.83. This movement follows the company's announcement of strong third-quarter financial results, which have contributed to the stock's impressive performance over the past year.
Zillow Group reported a third-quarter revenue of $581 million, reflecting a 17% year-over-year increase and surpassing Wall Street's forecast of $555 million. The company's adjusted EBITDA reached $127 million, exceeding the guidance midpoint by $24 million. This financial growth was supported by a 12% rise in residential revenue to $405 million, a 24% increase in rentals revenue to $123 million, and a substantial 63% boost in mortgage revenue to $39 million.
Looking forward, Zillow Group has provided a positive fourth-quarter revenue projection, estimated to be between $525 million and $540 million, representing a 12% increase at the midpoint. This optimistic forecast underscores the company's continuous expansion in its primary revenue segments.
In terms of stock analysis and valuation, Zillow Group (Z, Financial) currently holds a market capitalization of $17.09 billion. Although the company's Price-to-Tangible-Book ratio stands at 3.54, its Price-to-Book ratio is 3.54, suggesting the stock might be trading at a premium compared to its book value. The GF Value places the company's valuation as "Significantly Overvalued." For more details, you can check the GF Value.
Despite having a strong Altman Z-Score of 5.64, indicating financial strength, Zillow Group faces a severe warning sign regarding its declining revenue per share over the past five years. However, with a high institutional ownership of 93.33% and a modest insider ownership of 2.45%, the stock maintains significant investor interest.
Zillow Group's ROE and ROA are currently negative at -2.91% and -2.02%, respectively. Furthermore, the company is categorized as a "Distressed" stock with a "Mid Core" style box classification. Investors should be cautious of these factors when considering potential investments in the stock.
