ZG (Zillow Group Inc) vs S&P 500 Comparison

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Zillow Group Inc
Glance View

Economic Moat

None

Market Cap

15.9B USD

Industry

Real Estate

Zillow Group Inc. began as a bold experiment to revolutionize the housing market in the digital age, fundamentally reshaping how people buy, rent, and sell homes. Anchored in Seattle, Washington, Zillow made its mark by providing a treasure trove of real estate data, empowering users with newfound transparency and insights into property valuations through its signature “Zestimate.” Born from the minds of former Microsoft executives, Rich Barton and Lloyd Frink, Zillow transformed the real estate landscape, tapping into the vast opportunities of the online space. Its user-friendly platform amalgamates listings, market data, and user-generated content, offering a comprehensive tool for prospective homebuyers, sellers, and renters. Utilizing a blend of cutting-edge technology and extensive real estate segments, Zillow crafts an all-inclusive experience that connects users with homes and real estate professionals, making property transactions more accessible and informed than ever before. The company generates revenue mainly through its highly successful Premier Agent program, which enables real estate agents to gain prominence on the site by paying for advertising placements that connect them with high-intent users. Despite its early focus on advertising, Zillow has not stopped evolving; it has dipped its toes into the iBuying market with Zillow Offers, attempting to directly purchase homes from sellers and resell them, aiming to streamline the transaction process. Furthermore, through partnerships and subsidiaries, Zillow has expanded its reach into the realms of mortgage lending and title services. By offering these ancillary services, Zillow enhances its monetization strategy, capturing additional value from its vast audience. This multifaceted approach not only reinforces Zillow's position as a real estate titan but also ensures its continued adaptation and growth amid the constantly shifting dynamics of the housing market.

View ZG Analysis

ZG Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

US		CBRE Group Inc NYSE:CBRE	Add
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US		Jones Lang LaSalle Inc NYSE:JLL	Add
CA		FirstService Corp TSX:FSV	Add
CA		Colliers International Group Inc TSX:CIGI	Add
UK		Cushman & Wakefield PLC NYSE:CWK	Add
US	C	Compass Inc NYSE:COMP	Add
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HK	C	China Overseas Property Holdings Ltd HKEX:2669	Add
JP		Relo Group Inc TSE:8876	Add

US		CBRE Group Inc NYSE:CBRE	Select
CN	K	Ke Holdings Inc HKEX:2423	Select
US		Jones Lang LaSalle Inc NYSE:JLL	Select
CA		FirstService Corp TSX:FSV	Select
CA		Colliers International Group Inc TSX:CIGI	Select
UK		Cushman & Wakefield PLC NYSE:CWK	Select
US	C	Compass Inc NYSE:COMP	Select
US		Newmark Group Inc NASDAQ:NMRK	Select
HK	C	China Overseas Property Holdings Ltd HKEX:2669	Select
JP		Relo Group Inc TSE:8876	Select

US		CBRE Group Inc NYSE:CBRE	Add
CN	K	Ke Holdings Inc HKEX:2423	Add
US		Jones Lang LaSalle Inc NYSE:JLL	Add
CA		FirstService Corp TSX:FSV	Add
CA		Colliers International Group Inc TSX:CIGI	Add
UK		Cushman & Wakefield PLC NYSE:CWK	Add
US	C	Compass Inc NYSE:COMP	Add
US		Newmark Group Inc NASDAQ:NMRK	Add
HK	C	China Overseas Property Holdings Ltd HKEX:2669	Add
JP		Relo Group Inc TSE:8876	Add

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ZG

vs

S&P 500

Stocks Performance
ZG vs S&P 500

Performance Gap
ZG vs S&P 500

Performance By Year
ZG vs S&P 500

Competitors Performance
Zillow Group Inc vs Peers

Zillow Group Inc
Glance View

Company

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ZG vs S&P 500

Stocks Performance ZG vs S&P 500

Performance Gap ZG vs S&P 500

Performance By Year ZG vs S&P 500

Competitors Performance Zillow Group Inc vs Peers

Zillow Group Inc Glance View

Company

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Stocks

ZG

vs

S&P 500

Stocks Performance
ZG vs S&P 500

Performance Gap
ZG vs S&P 500

Performance By Year
ZG vs S&P 500

Competitors Performance
Zillow Group Inc vs Peers

Zillow Group Inc
Glance View