Should Zillow's CreditClimb Tool Shift Investors' Views on ZG's Long-Term Growth Potential?

• Zillow has launched CreditClimb, a new tool that allows renters across the US to report on-time rent payments to all major credit bureaus for US$20 per year, tracking credit scores and even retroactively adding up to two years of rent history.
• The program aims to address the gap where nearly 87% of renters do not see their rent payments reflected on credit reports, potentially helping more renters qualify for loans and move toward homeownership.
• We'll now examine how this expansion into credit-building services for renters may influence Zillow's investment narrative and growth path.

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Zillow Group Investment Narrative Recap

To be a Zillow shareholder, you typically need to believe that the company can successfully expand beyond its core listings and advertising revenue into new, tech-enabled services that capture greater value from the housing ecosystem. The launch of CreditClimb represents a push into credit-building for renters, but it is not expected to materially impact Zillow’s most important short-term catalyst, growth in digital transaction services, or significantly reduce exposure to risks tied to housing affordability or agent commission pressures.

Of recent announcements, the October partnership with Esusu to offer rental payment reporting is especially relevant to CreditClimb, as it laid the technological and operational foundation for this new tool. This move aligns with Zillow’s broader effort to increase monetization opportunities in rentals and supports its goal of expanding ancillary service revenue, which remains a supporting catalyst amid shifting market dynamics.

However, in contrast, investors should be aware that Zillow still faces significant risk from persistently low home affordability and...

Read the full narrative on Zillow Group (it's free!)

Zillow Group's outlook anticipates $3.6 billion in revenue and $415.2 million in earnings by 2028. This scenario is based on a 14.8% annual revenue growth rate and a $477.2 million increase in earnings from the current -$62.0 million.

Uncover how Zillow Group's forecasts yield a $88.46 fair value, a 32% upside to its current price.

Exploring Other Perspectives

Seven Simply Wall St Community fair value estimates for Zillow range from US$28.38 to US$102.58 per share, showing wide divergence. Consider how execution risk in scaling new business initiatives could shape future expectations in light of these differing viewpoints.

Explore 7 other fair value estimates on Zillow Group - why the stock might be worth less than half the current price!

Build Your Own Zillow Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Zillow Group research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Zillow Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Zillow Group's overall financial health at a glance.

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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.

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