Alphabet Inc.

(NASDAQ Global Select)
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Very Bullish +85

What Gave Alphabet Stock Its Edge Over Zillow? - Yahoo Finance

Company update AI-generated analysis

πŸ“ˆ Alphabet stock rose 90.8% over five years to October 2026, vastly outperforming industry peer Zillow which fell 69.8%.

πŸ’° Alphabet's earnings per share increased by 269.2% between 2021 and 2026, while Zillow's EPS declined by 62.1%.

πŸ“Š Revenue for Alphabet grew 96.9% from 2021 to 2026, whereas Zillow's revenue contracted by 29.3% over the same period.

πŸ” The performance gap is driven by profit per share; Alphabet expanded its operating margin by 3.0 points while Zillow's shrank by 6.3 points.

πŸ“‰ Alphabet reduced its diluted share count by 8.6% in the latest quarter compared to five years prior, boosting per-share metrics.

🏒 Alphabet generates revenue through Search and YouTube advertising platforms as well as Google Cloud services.

βœ‚οΈ Zillow is executing a restructuring plan that involves cutting approximately 7% of its employees to operate more efficiently.

πŸ“ˆ Zillow reported an operating margin of 3.4% in fiscal Q2 2026, recovering from an operating loss of 1.7% in the prior quarter.

🎯 Management expects Zillow's EBITDA margins to expand in fiscal 2026, guiding to approximately 25% for fiscal Q3 2026.

Bullish Signals
  • Alphabet stock rose 90.8% over five years to October 2026, significantly outperforming its industry peers.
  • Alphabet's earnings per share climbed 269.2% between 2021 and 2026, demonstrating strong profitability growth.
  • Revenue for Alphabet increased by 96.9% from 2021 to 2026, driven by Search, YouTube, and Google Cloud.
  • Alphabet expanded its operating margin by 3.0 points while simultaneously reducing its diluted share count by 8.6%.
  • Investors paid a lower multiple for Alphabet in 2026 (14.6x earnings) compared to 2021 (25.2x), indicating a re-rating of value.
Risk Factors
  • The article does not identify any specific negative financial risks or operational challenges for Alphabet; the focus is entirely on its outperformance relative to Zillow.
Full Analysis
Over a five-year period ending October 2026, Alphabet (GOOG) significantly outperformed its industry peer Zillow (ZG), with GOOG shares rising 90.8% while ZG fell 69.8%. The analysis attributes this divergence primarily to superior profit generation rather than sales growth alone. While both companies experienced similar revenue growth rates over the last three years, Alphabet's total revenue increased by 96.9% between 2021 and 2026 compared to a 29.3% decline for Zillow during the same window. The primary driver of the valuation gap was earnings per share performance. Alphabet's EPS climbed 269.2% from 2021 to 2026, supported by an expansion in operating margins and a reduction in its diluted share count of 8.6%. In contrast, Zillow's EPS fell 62.1% as its operating margin shrank by 6.3 points. Investors paid significantly lower multiples for Alphabet (dropping from 25.2x to 14.6x earnings) compared to the much higher multiples historically associated with Zillow. Alphabet generated revenue through its Search, YouTube advertising platforms, and Google Cloud services, maintaining strong profitability. Meanwhile, Zillow is currently undergoing a restructuring effort, cutting approximately 7% of its workforce to improve efficiency. Management expects EBITDA margins to expand in fiscal 2026, though the company recently reported an operating margin of only 3.4% in Q2 2026 after posting an operating loss in the prior year.