Compare Zillow Group, Inc. Class A (ZG) vs Netflix, Inc. (NFLX) Stock

Netflix, Inc. (NFLX) offers the better valuation at 38.0x trailing P/E (30.8x forward), making it the more compelling value choice. Analysts rate Zillow Group, Inc. Class A (ZG) a "Buy" — based on 48 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Netflix, Inc. (NFLX) is the cheapest at 38.0x versus Zillow Group, Inc. Class A at 497.8x. On forward P/E, Zillow Group, Inc. Class A is actually cheaper at 20.4x — notably different from the trailing picture, reflecting expected earnings growth.

Over the past 5 years, Netflix, Inc. (NFLX) delivered a total return of +74.8%, compared to -74.5% for Zillow Group, Inc. Class A (ZG). A $10,000 investment in NFLX five years ago would be worth approximately $17K today (assuming dividends reinvested). Over 10 years, the gap is even starker: NFLX returned +930.4% versus ZG's +93.5%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Netflix, Inc. (NFLX) is the lower-risk stock at 0.76β versus Zillow Group, Inc. Class A's 1.11β — meaning ZG is approximately 46% more volatile than NFLX relative to the S&P 500. On balance sheet safety, Zillow Group, Inc. Class A (ZG) carries a lower debt/equity ratio of 2% versus 54% for Netflix, Inc. — giving it more financial flexibility in a downturn.

Netflix, Inc. (NFLX) is the more profitable company, earning 24.3% net margin versus 0.9% for Zillow Group, Inc. Class A — meaning it keeps 24.3% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: NFLX leads at 29.5% versus -1.3% for ZG. At the gross margin level — before operating expenses — ZG leads at 74.1%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

On forward earnings alone, Zillow Group, Inc. Class A (ZG) trades at 20.4x forward P/E versus 30.8x for Netflix, Inc. — 10.4x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for ZG: 60.6% to $71.93.

None of the stocks in this comparison currently pay a material dividend. All are effectively zero-yield and should be held for capital appreciation rather than income.

For long-horizon retirement investors, Netflix, Inc. (NFLX) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.76), +930.4% 10Y return). Both have compounded well over 10 years (NFLX: +930.4%, ZG: +93.5%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Communication Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.