Zillow Group, Inc. (NASDAQ:ZG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Zillow Group, Inc. operates real estate brands in mobile applications and Websites in the United States. With the latest financial year loss of US$112m and a trailing-twelve-month loss of US$81m, the US$17b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Zillow Group's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Zillow Group is bordering on breakeven, according to the 29 American Real Estate analysts. They expect the company to post a final loss in 2024, before turning a profit of US$20m in 2025. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 53% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Zillow Group's growth isn’t the focus of this broad overview, however, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
See our latest analysis for Zillow Group
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 12% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Zillow Group which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Zillow Group, take a look at Zillow Group's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:
- Valuation: What is Zillow Group worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Zillow Group is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Zillow Group’s board and the CEO’s background.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.