December 21, 2016

Valens Equities Weekly Equity Idea Highlight for December 21, 2016 – Zillow Group, Inc.


This week the Valens Securities team highlights our most interesting equity insight from across our tools and our analysis.

Zillow Group, Inc. (ZG): Pessimistic market outlook for growth and ROA’, controlling market position with huge addressable market opportunities and management confidence about their strategy spell equity upside

veih-zg-2016-12-21

ZG is trading at the low end of historical valuations with a 7.6x V/A’ and a 20.1x V/E’. After the acquisition of Trulia, ZG has seen ROA’ rise from 20% to 32%, which it is projected to maintain going forward. However, the market is expecting ROA’ to fall to 20%, in line with historical pre-acquisition profitability levels, with Asset’ growth being reduced by half.

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