Zillow Group, Inc. is facing investor concern as Google tests a new real estate advertising format that could challenge Zillow’s core marketplace model. Google’s product integrates property listings into search results, reducing reliance on listing agents and intensifying competition. This could impact Zillow’s traffic acquisition and margins in the long term.

A bearish thesis on Zillow Group, Inc. was shared on an investing subreddit, highlighting concerns over Google’s new real estate advertising format. ZG’s stock price was $67.80 on January 13th, with a forward P/E of 32.89. The new product integrates property listings into search results, potentially impacting Zillow’s traffic acquisition and margins.

Goldman Sachs believes Google’s new real estate advertising format may have limited near-term impact on Zillow Group, Inc. due to ZG’s direct traffic and Google’s initial rollout being restricted. However, the long-term implications are concerning, with Google’s distribution power threatening Zillow’s role as the default starting point for home searches. This could pressure Zillow’s traffic acquisition and margins over time.

A bullish thesis on Opendoor Technologies Inc. highlighted margin discipline, liquidity strength, cost reductions, and the shift toward an asset-light platform model. The stock has appreciated by approximately 676.37% since coverage, driven by improved operating leverage. While a bearish view on Zillow Group, Inc. exists, the balance sheet strength of Opendoor Technologies Inc. remains intact.

Read more at Yahoo Finance: Zillow Group, Inc. (ZG): A Bear Case Theory