Z
Zillow Group, Inc. Class C
$36.34
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 61.1% above fair value
Bear
$22.55
-37.9%
6% stage 1 growth, 12% discount
Fair
$22.55
-37.9%
10% stage 1 growth, 12% discount
Bull
$22.55
-37.9%
13% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
0%
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $67.75 from 46 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $22.55 per share.
Warnings
Stock-based employee pay equals 1696% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $67.75 (from 46 analysts). Our estimate is 95% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions