ZG
Zillow Group, Inc. Class A
$31.88
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 570.1% above fair value
You pay
$31.88
Bear
$4.43
Fair
$4.76
Bull
$5.08
Bear
$4.43
-86.1%
6% stage 1 growth, 12% discount
Fair
$4.76
-85.1%
10% stage 1 growth, 12% discount
Bull
$5.08
-84.1%
13% stage 1 growth, 12% discount
Adjust Assumptions
9.7%
12.0%
3.0%
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
34%
Implied Market Multiple
386.8x
Market is pricing in (growth)
52.2%
vs 9.7% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (49 analysts)
$48.60
Divergence from AlphaVal
90%
Summary
Using a two-stage FCF DCF with 10% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $4.76 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 $48.60 (from 49 analysts). Our estimate is 90% 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