For informational purposes only. Not investment advice.
What the Software & SaaS Specialized template measures
Software costs almost nothing to reproduce, so the entire economic question is whether customers keep paying. Revenue is a subscription rather than a sale, the cost of winning a customer is paid years before that customer becomes profitable, and margins arrive only if renewals hold. The Software & SaaS template scores retention, reinvestment, and the point at which growth turns into cash.
Pricing Power
Score 58
· 20% of the moat score
In software, pricing power is visible in gross margin: a vendor that has to discount in order to renew gives it up first. Sustained premium gross margins mean the product is embedded in a workflow the customer would have to rebuild in order to replace it — pricing defended by the cost of leaving rather than by contract terms.
Recurring Revenue Stickiness
Score 54
· 18% of the moat score
Recurring revenue is the model's central claim, and it is a moat only when customers renew and expand without being re-sold each year. The signature is revenue that grows smoothly and is backed by contracted future obligations — deferred revenue and bookings rising alongside it — rather than revenue that has to be won again every cycle.
Innovation Engine
Score 49
· 16% of the moat score
Software is competed away rather than depreciated, so a vendor that stops investing loses its category. The defense is reinvestment that stays productive: research spending high enough to defend the roadmap while growth and margin remain in balance. Heavy spending alongside slowing growth suggests the product is being maintained rather than extended.
Cash Scalability
Score 65
· 18% of the moat score
The test of a software business is whether growth eventually stops consuming cash. Because platform costs are largely fixed, incremental revenue should convert into operating and free cash flow at a very high rate once the customer base is large enough. A company growing quickly without that conversion improving is buying revenue rather than compounding it.
Capital Efficiency
Score 58
· 16% of the moat score
A software platform employs very little capital, so a genuine franchise should produce high returns on it without leverage. Returns achieved that way say the advantage is the product; returns achieved through debt or acquisition accounting say considerably less. Durability across several years matters more than the level in any one of them.
Balance Sheet Resilience
Score 65
· 12% of the moat score
Software companies fund years of customer acquisition before those customers pay back, which makes access to capital a strategic variable rather than a treasury detail. A net cash position and comfortable liquidity mean the roadmap and the sales engine survive a funding-market shutdown — precisely when weaker competitors cut the spending that retains customers.
Understanding ZG's moat
What is Zillow Group, Inc.'s moat score?
Zillow Group, Inc. (ZG) scores 58 out of 100 on the StatsAlpha Moat Map, which rates its competitive advantage as moderate. The score is a weighted composite of 6 competitive defenses, each measured against industry peers of 590 companies in Internet Content & Information.
How is the moat score calculated?
Each company is scored with an industry-specific template — Software & SaaS Specialized in this case, chosen because the defenses that matter to a bank are not the ones that matter to a software company. Every defense combines several financial signals, and each signal is measured as a percentile against a peer group of 590 companies in Internet Content & Information. The defenses are then weighted to produce the overall score out of 100.
Why is Zillow Group, Inc. scored with the Software & SaaS Specialized template?
Software costs almost nothing to reproduce, so the entire economic question is whether customers keep paying. Revenue is a subscription rather than a sale, the cost of winning a customer is paid years before that customer becomes profitable, and margins arrive only if renewals hold. The Software & SaaS template scores retention, reinvestment, and the point at which growth turns into cash.
Which competitive defenses are measured for Zillow Group, Inc.?
The Software & SaaS Specialized template measures 6 defenses: Pricing Power, Recurring Revenue Stickiness, Innovation Engine, Cash Scalability, Capital Efficiency, Balance Sheet Resilience. Each is scored independently, so a company can be strong on one and weak on another — the overall score reflects how those defenses are weighted for this industry.
What does the moat score mean for investors?
A moat is a durable structural advantage that lets a company defend its returns from competitors. A high score indicates the financial signature of one — pricing power, cost advantage, customer stickiness — measured relative to peers. It is a quantitative screen built from reported financials, not a price target or a recommendation, and it describes the business rather than the attractiveness of the stock at its current price.
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