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Is Z. a good stock to buy? We came across a bullish thesis on Zillow Group, Inc. on r/ValueInvesting by mrmrmrj. In this article, we will summarize the bulls’ thesis on Z.. Zillow Group, Inc.'s share was trading at $32.01 as of June 17th. Z.’s trailing and forward P/E were 133.04 and 14.79 respectively according to Yahoo Finance.

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Zillow Group operates a real estate application and website that connects consumers with technology, agents and loan officers, and digital solutions in the United States. Z is positioned as a re-rating opportunity in the U.S. housing and digital real estate ecosystem following its strategic shift toward a capital-light, fee-based model. The company exited its home-buying operations in 2021, eliminating balance sheet-intensive exposure to property inventory risk and enabling a transition toward a more scalable software and services-driven business.

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This restructuring has significantly improved financial quality, allowing Zillow to become profitable in 2025 and operate with a de-levered balance sheet and no long-term debt, a notable improvement compared to its prior capital-heavy model. Despite macro headwinds in the housing market, the company continues to demonstrate underlying growth, supported by steady demand across its digital real estate platform.

The investment case is increasingly driven by accelerating earnings power and a disconnect between fundamentals and valuation. Enterprise value has compressed to approximately $7 billion, compared to over $30 billion in prior cycles when the business was less efficient and more capital intensive.

Meanwhile, earnings expectations have been steadily revised upward, with GAAP EPS estimates for 2026 rising from approximately $0.50 to over $0.80 within a year, even as the stock price has lagged. Looking further out, the business is seen as capable of generating $3 or more in GAAP EPS by 2029–2030, with potential to reach around $5 in adjusted EPS terms, reflecting meaningful operating leverage as the platform scales.

This creates a compelling asymmetry where a higher-quality, de-risked business is trading near historically low valuation levels. Over the next four years, Zillow is expected to deliver consistent EPS growth, a characteristic it has never previously achieved even during periods of significantly higher enterprise value. The combination of improving profitability, a capital-light structure, and expanding earnings trajectory positions Zillow as a potential long-term rerating candidate, with meaningful upside as market sentiment aligns with its evolving fundamentals.

Previously, we covered a bullish thesis on Opendoor Technologies Inc. (OPEN) by LongYield in May 2025, which highlighted its shift toward disciplined pricing, agent partnerships, and a path to profitability amid weak housing demand. OPEN’s stock price has appreciated by approximately 410.32% since our coverage. mrmrmrj shares a similar view but emphasizes Zillow Group, Inc. (Z)’s capital-light restructuring and valuation re-rating potential.

Zillow Group, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held Z. at the end of the first quarter which was 70 in the previous quarter. While we acknowledge the risk and potential of Z. as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Z. and that has 10,000% upside potential, check out our report about this cheapest AI stock.

Disclosure: None.