What Gave Alphabet Stock Its Edge Over Zillow

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Over the five years to October 2026, two stocks in the same industry moved in opposite directions: one rose 90.8% and the other fell 69.8%. The first is Alphabet (GOOGL). The second is Zillow (ZG), and its holders have reason to ask what went wrong. Where do you think the gap came from: faster sales growth, faster profit growth, or investors paying more for each dollar of profit?

Who Has Beaten Zillow Over Five Years?

Zillow's stock actually outperformed most of its industry, beating 19 of the 31 companies in it over those five years. Yet among the companies whose three-year sales growth came within 4 points of Zillow's, Alphabet fared far better, finishing 160.7 points ahead.

Outperforming most of the industry was a low bar. The typical stock in Zillow's industry fell 71.6% over the same five years, a decline not far from Zillow's own fall.

Did Alphabet Grow Faster Than Zillow?

Yes: slightly over three years and by a wide margin over five. Alphabet's sales grew an average of 16.7% a year over the last three years, compared to 14.1% for Zillow. Alphabet sells ads through products such as Search and YouTube, and sells cloud services through Google Cloud.

Between 2021 and 2026, Alphabet's revenue rose 96.9%, while Zillow's fell 29.3%. Zillow's sales have risen in each of the last three years, so the decline happened earlier in the window. Alphabet's sales grew faster over five years, and that is part of the gap.

Where Did The Gap Come From?

Most of the difference came from profit per share. Between 2021 and 2026, Alphabet's earnings per share climbed 269.2%. Zillow's fell 62.1% as its operating margin shrank by 6.3 points.

Alphabet's sales increased 96.9% and its operating margin expanded by 3.0 points, so its operating profit more than doubled. Net income climbed faster still, rising 233.8%, while the company's diluted share count in the latest quarter was 8.6% lower than five years earlier.

The multiple did not open the gap. Investors paid 25.2 times earnings for Alphabet in 2021 and pay 14.6 times today, while Zillow's multiple dropped from 206 times to 132.1 times. Alphabet's 2021 multiple is priced on September 30, 2021, and Zillow's on June 30, 2021. Both multiples fell, so the difference came from profit per share.

Zillow is now working on its margin. The company generates revenue from rentals and its for-sale business, which includes residential revenue and Zillow Home Loans. On its August 5, 2026 call, management said the company was cutting about 7% of employees in a restructuring to operate more efficiently. Zillow reported an operating margin of 3.4% in fiscal Q2 2026, up from an operating loss of 1.7% of sales in fiscal Q2 2025.

What To Watch In Zillow's Next Report

Management expects its EBITDA margin, its own adjusted measure, to keep expanding in 2026, guiding to about 25% for fiscal Q3 2026. The company also expects more restructuring costs in that quarter, which the adjusted measure leaves out. Zillow's reported operating margin is the number to watch in its fiscal Q3 2026 report.

How To Act On ZG?

Not necessarily on Zillow alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here is one company from Zillow's own industry that has beaten it. Over the five years to October 2026, Alphabet stock rose 90.8%, while Zillow stock fell 69.8%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.

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