Real estate platform ZG is a business we still really like despite a 30% pullback in the share price. We’ve often written it up as a top pick for the International Equities Portfolio, having initially bought mid-way through 2024 at ~$46. Like many high-growth, high-valuation stocks of late, the share price has come under significant pressure.
ZG still does not screen excessively cheap from an earnings multiple perspective, trading on 31x FY25 Est earnings, though, when we overlay that with the expected growth over the coming 3 years, averaging an earnings growth rate of ~35%, it looks attractive. Their ability to execute this growth strategy will be central to how the stock price trades, and it is at the pointy end of the risk-off trade in the U.S. and global equities, making it a higher-risk position. However, as we’ve written in recent reports, these are the times to ‘lean in’ to volatility, buying high-quality stocks with strong business models in large markets, and we think Zillow fits that bill.
MM remains bullish on ZG ~US$59
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