Zillow Group Inc’s (NASDAQ:ZG) Path To Profitability
Zillow Group Inc’s (NASDAQ:ZG): Zillow Group, Inc. operates real estate and home-related information marketplaces on mobile and the Web in the United States. With the latest financial year loss of -US$94.4m and a trailing-twelve month of -US$89.7m, the US$8.95b market-cap alleviates its loss by moving closer towards its target of breakeven. Many investors are wondering the rate at which ZG will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for ZG’s growth and when analysts expect the company to become profitable.
View our latest analysis for Zillow Group
ZG is bordering on breakeven, according to Interactive Media and Services analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$44.3m in 2020. So, ZG is predicted to breakeven approximately a couple of months from now! What rate will ZG have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 63.1%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of ZG’s upcoming projects, but, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that ZG has managed its capital judiciously, with debt making up 13.8% of equity. This means that ZG 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 too many aspects of ZG to cover in one brief article, but the key fundamentals for the company can all be found in one place – ZG’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should further research:
Valuation: What is ZG 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 ZG 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 back ground.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
