Zillow Group, Inc. (ZG): a likely value trap?

Avoid — Zillow is now fighting an FTC antitrust case, a securities-fraud lawsuit, and a direct assault from Google on its core listings business.

⚠ TRAP Fundamentals73/100

Down 84% from its all-time high of $202.94 — now $31.80

$90.2$26.2 peak $85 20222023202420252026

Why ZG dropped

The 2021 collapse was caused by the failed "Zillow Offers" home-flipping business, which the company shut down after huge losses — that's old news and already priced in. But the stock has kept falling in 2026 for new reasons: the FTC filed a complaint against Zillow and Redfin in September 2025 alleging the two agreed to remove competition from the rental listings market, and Zillow's CFO said in February 2026 that increased legal expenses would create a roughly 200 basis point drag on margins, causing a 16-17% one-day stock drop. On top of that, multiple law firms have since filed active securities-fraud class actions covering purchases between February 11, 2025 and May 7, 2026 for allegedly failing to disclose material information, with a lead-plaintiff deadline of August 10, 2026 — meaning this litigation is unresolved right now, not history.

Fwd P/E 10.4Op margin 5.1%Rev growth 18.4%Debt/equity 9.7%Analyst upside 96.8%
How this scored 73/100
✅ Passes all 4 hard checks — profitable, cash-generative, and financially survivable.
✅ Makes money Net profit margin 2.3%
✅ Generates cash Free cash flow $286M
✅ Not drowning in debt Debt/equity 9.7% (limit 200%)
✅ Can pay its bills Current ratio 2.3 (needs 1+)

Bar length shows how much each metric is worth — a 10-point metric is twice as wide as a 5-point one. Hover any row for what it means.

Profitability Does it actually make money? 3/25
Operating margin 5.1% 2/9
Net profit margin 2.3% 1/8
Return on equity 1.3% 0/8
Growth Is it getting bigger, or dying? 23/25
Revenue growth 18.4% 7/9
Earnings growth 533.3% 8/8
Expected profit change 1119.3% 8/8
Value Is it cheap right now? 23/25
Forward P/E 10.4 9/10
PEG ratio 0.9 7/8
Analyst target upside 96.8% 7/7
Balance sheet Will it survive? 24/25
Debt / equity 9.7% 10/10
Current ratio 2.3 7/8
Free cash flow $286M 7/7

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Analysis generated by SmartStonks's AI from public fundamentals and news, first flagged 2026-07-22. Research only — not financial advice.