Is Zillow Group, Inc. overvalued or undervalued?

As of 2 November 2021, Zillow Group, Inc. has moved from a fair to a risky valuation grade. The company is currently overvalued, indicated by its significant negative P/E ratio of -205.86 and an EV to EBITDA ratio of 130.12, which suggests that investors are paying a premium for earnings that are not currently being generated. Additionally, the Price to Book Value stands at 3.56, further emphasizing the disconnect between the company's market price and its underlying assets.
In comparison to its peers, Zillow's valuation metrics are starkly unfavorable. For instance, SS&C Technologies Holdings, Inc. has a P/E ratio of 23.55 and an EV to EBITDA of 11.01, showcasing a more stable valuation environment. Similarly, EPAM Systems, Inc. presents a P/E of 22.32 and an EV to EBITDA of 12.35. Zillow's recent stock performance has been volatile, with a year-to-date return of -6.74%, contrasting with the S&P 500's 2.44% gain, which reinforces the notion of overvaluation amidst a broader market recovery.