ZG
Zillow Group, Inc. Class A
$36.88
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 69.8% above fair value
Bear
$21.73
-41.1%
6% stage 1 growth, 12% discount
Fair
$21.73
-41.1%
10% stage 1 growth, 12% discount
Bull
$21.73
-41.1%
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 $65.00 from 49 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $21.73 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 $65.00 (from 49 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