Zillow Group (ZG) just wrapped up FY 2025 with Q4 revenue of US$654 million and basic EPS of US$0.01, alongside trailing twelve month revenue of US$2.6 billion and EPS of US$0.10, marking a clean shift into positive earnings territory over the past year. The company has seen quarterly revenue move from US$554 million and a basic EPS loss of US$0.22 in Q4 2024 to US$654 million and EPS of US$0.01 in Q4 2025, while trailing twelve month EPS moved from a loss of US$0.48 to a profit of US$0.10. This puts the focus squarely on how durable this profitability and margin profile really is.

With the latest numbers on the table, the next step is to see how this turn to profitability lines up with the widely followed narratives around Zillow Group's growth potential and risk profile, and where those stories might need an update.

TTM profit swings from US$112 million loss to US$23 million profit

• On a trailing twelve month basis, Zillow Group moved from a net loss of US$112 million in Q4 2024 to a net profit of US$23 million by Q4 2025, with Basic EPS shifting from a loss of US$0.48 to a profit of US$0.10 over the same window.
• Supporters of the bullish view point to this shift to profitability alongside forecasts of roughly 38% annual earnings growth and 12% annual revenue growth. However, the five year earnings change of roughly 40.5% decline per year in the dataset shows how recent the turnaround is and
  • the data describes these latest earnings as high quality, which heavily supports the bullish focus on operating progress,
  • but the long history of weaker EPS means bulls are leaning on a relatively short track record when they argue for a much stronger earnings profile ahead.

Bulls argue this earnings swing is the start of a much bigger shift in Zillow's profit potential, and the full bullish case breaks that out in detail here: 🐂 Zillow Group Bull Case

Quarterly profits stay small against US$2.6b of TTM revenue

• Across FY 2025, quarterly net income excluding extra items ranged between US$2 million and US$10 million per quarter on revenue of US$598 million to US$676 million, while trailing twelve month revenue reached about US$2.6b against net income of US$23 million.
• Critics in the bearish camp highlight that this level of profitability leaves only thin margins to absorb any pressure, and that even with forecasts for profit margins to rise over time, the recent history of earnings decline in the trailing data makes them cautious
  • the negative five year earnings per share trend in the dataset lines up with that concern that profit expansion is not yet well established,
  • and the small absolute profit in FY 2025 compared with multi billion dollar revenue means the business still has limited buffer if costs or housing activity move the wrong way.

Skeptics argue these slim margins leave little room for error, and you can see how that feeds into their detailed downside case here: 🐻 Zillow Group Bear Case

Premium 4.2x P/S and large gap to DCF fair value

• The stock is trading on a P/S ratio of 4.2x vs peer and US Real Estate industry averages of 2.4x and 2.5x, while the supplied DCF fair value of US$105.91 sits well above the current share price of US$45.10.
• What stands out is the tension between the bullish argument that the DCF fair value points to a large valuation gap and the cautious view that a premium sales multiple already prices in a lot of success
  • the DCF output in the data leans on the same roughly 38% earnings and 12% revenue growth forecasts that bullish investors reference when they talk about upside potential,
  • yet the higher P/S relative to peers gives bears ammunition when they argue that, given the thin recent margins and negative long term earnings record, investors are already paying up for Zillow's story compared with other real estate names.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Zillow Group on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

See the numbers differently? If you think the data tells another story, put your view on paper in a few minutes and Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Zillow Group.

See What Else Is Out There

Zillow Group is earning only slim profits on roughly US$2.6b of trailing revenue, while carrying a premium 4.2x P/S relative to sector peers.

If that thin margin and higher price tag makes you cautious, now is a good time to compare with 52 high quality undervalued stocks that pair stronger value signals with more modest expectations.

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.