Core Viewpoint - Zillow's stock is currently trading at depressed levels, with mixed signals regarding its future performance and valuation Financial Performance - In the fourth quarter, Zillow reported revenue of approximately $654 million, slightly exceeding Wall Street expectations, while adjusted earnings per share (EPS) of 39 cents missed consensus by one cent [2] - Management has guided first-quarter revenue to a range of $700 million to $710 million, surpassing estimates of around $690 million, indicating ongoing top-line growth despite investor concerns about margins and profitability [2] Valuation Concerns - Legal costs and the emergence of new competitors are currently weighing on Zillow's stock valuation, creating near-term uncertainty [3] - There is potential for Zillow to benefit from normalized legal spending and a recovery in the housing market in the long term [3] Technical Indicators - The Relative Strength Index (RSI) is at 16.12, indicating that the stock is in oversold territory, which may suggest a potential reversal if buying interest increases [4] - The Moving Average Convergence Divergence (MACD) is below its signal line, reinforcing the bearish sentiment surrounding the stock [4] - The combination of an oversold RSI and bearish MACD indicates mixed momentum, suggesting that traders should remain cautious [4] Stock Performance - As of the latest publication, Zillow's shares were down 0.32% at $43.56, with a week-to-date decline of approximately 19.6% [5] - The stock is trading near its 52-week low of $43.22, with key resistance identified at $45.00 and key support at $43.00 [5]

Core Viewpoint - Zillow's shares have experienced a significant decline, dropping 45% over the past year and falling 17% on a single day following earnings results [1] Company Summary - Zillow's stock performance has been negatively impacted, particularly in the context of the real estate services sector [1]

Core Viewpoint - Zillow's shares have experienced a significant decline, dropping 45% over the past year and falling 17% on a single day following earnings reports [1] Company Summary - Zillow's stock performance has been notably poor, with a 45% decrease in value over the last year [1] - The company saw a sharp decline of 17% in its share price on Wednesday, which is attributed to the earnings report and broader trends in the real estate services sector [1]

Core Viewpoint - Zillow Group (NASDAQ:ZG) is considered one of the most oversold stocks on NASDAQ, with varying price target adjustments from different analysts reflecting market conditions and company performance [1][3][4]. Price Target Adjustments - Keefe Bruyette adjusted the price target for Zillow Group to $80 from $65, maintaining a Market Perform rating, while noting uncertainty regarding the outcome of the Compass trial [1]. - KeyBanc reduced its price target for Zillow Group to $75 from $90, reaffirming an Overweight rating, citing lower multiples across internet and technology stocks but viewing the recent pullback as a buying opportunity [3]. - Barclays upgraded Zillow Group to Equal Weight from Underweight, raising the price target to $72 from $66, indicating a stable residential backdrop and potential for mid-teens revenue growth and faster EBITDA [4]. Company Overview - Zillow Group operates in the real estate and home-related information marketplaces, providing services on mobile and web platforms [4].

Group 1 - Zillow is currently facing multiple lawsuits from both competitors and consumers, which target various aspects of its business [1]

Core Viewpoint - The company faces challenges due to elevated legal costs and competitive pressures, leading to a cautious outlook despite potential upside from a housing market recovery [1][2][8] Margin Outlook And Earnings Power - Excluding legal expenses, the company could show significant improvement in incremental margins, with estimates of around 50% incremental margins in 2025 [2][3] - Including legal costs, incremental margins are expected to remain in the 30%-40% range for the third consecutive year [3] - By 2027, as legal costs decline, adjusted EBITDA margins could normalize to approximately 60%, reflecting a return to stronger profitability [4] Revenue Growth And Housing Market Catalyst - Revenue growth is projected to slow from 16% in 2026 to 11% in 2027, but stronger performance could enhance adjusted EBITDA due to fixed-cost leverage [5] - A recovery in the housing market is seen as a significant revenue catalyst, although it is expected to occur gradually rather than sharply [5] Private Listing Networks And Competitive Risks - Management believes private listing networks account for less than 1% of total listings and currently do not materially impact the business [6] - Despite the immaterial immediate revenue impact, structural uncertainties may affect the stock's valuation multiple [6] Quarterly Results And Guidance Shortfall - The fourth-quarter adjusted EBITDA was 2% below estimates due to weaker margins, and first-quarter guidance was 5% below projections primarily due to higher costs [7] - Full-year 2026 estimates were only reduced by 1%, indicating improved expectations for the second half of 2026 [7] Overall Market Sentiment - The company is experiencing improving operating leverage and potential housing recovery as upside drivers, but legal costs and competitive dynamics warrant a cautious approach [8] - At the time of publication, Zillow shares were down 18.11% at $44.80, marking a new 52-week low [8]

Group 1 - The company reported revenue of $654 million, exceeding estimates of $650.29 million, while adjusted EPS was 39 cents, slightly below the expected 40 cents [1] - CEO Jeremy Wacksman highlighted strong results for the fourth quarter and the entire year of 2025, achieving all financial targets including positive net income and gaining market share in both For Sale and Rentals [1] Group 2 - For the first quarter, the company expects revenue to be between $700 million and $710 million, surpassing estimates of $690.33 million [2] - Following the earnings announcement, Zillow shares fell by 17.2%, trading at $45.04 [2] - Analysts adjusted their price targets for Zillow after the earnings report [2]

Core Insights - Zillow Group, Inc. reported mixed fourth-quarter 2025 results, with revenues exceeding estimates but adjusted earnings falling short [1][8] Financial Performance - The company achieved a GAAP net income of $3 million or 1 cent per share, a significant improvement from a net loss of $52 million or 22 cents per share in the same quarter last year [2] - Non-GAAP net income for the quarter was $98 million or 39 cents per share, up from $68 million or 27 cents per share year-over-year, but missed the Zacks Consensus Estimate of 42 cents per share [2] - For the full year 2025, GAAP net income was $23 million or 9 cents per share, compared to a net loss of $112 million or 48 cents per share in 2024 [3] - Non-GAAP net income for 2025 was $417 million or $1.64 per share, an increase from $349 million or $1.38 per share in 2024 [3] Revenue Growth - Quarterly revenues rose to $654 million from $554 million in the prior year, surpassing the Zacks Consensus Estimate of $650 million [4] - For 2025, total revenues increased to $2.58 billion from $2.24 billion in 2024 [4] - Residential revenues grew by 8% to $418 million, driven by strong performance in agent and software offerings [4] - The Mortgages segment generated $57 million in revenues, up from $41 million year-over-year, primarily due to a 67% increase in purchase loan origination [5] - Rental revenues surged by 45% to $168 million, largely due to a 63% year-over-year growth in multifamily revenues [5] Profitability Metrics - Gross profit for the quarter was $476 million, compared to $420 million in the prior year, with margins of 73% and 76% respectively [6] - Operating expenses decreased to $487 million from $489 million year-over-year [6] - Adjusted EBITDA was $149 million, up from $112 million a year ago, with margins of 23% and 20% respectively [6] Cash Flow and Liquidity - In Q4, Zillow generated $72 million in cash from operations, down from $122 million in the previous year [9] - For 2025, cash generated from operating activities was $368 million, compared to $428 million in 2024 [9] - As of December 31, 2025, the company had $768 million in cash and cash equivalents, down from $1.1 billion a year ago [9] Future Outlook - For Q1 2026, Zillow expects total revenues between $700 million and $710 million, with rental revenues projected to grow by 40% year-over-year [10] - For 2026, the company anticipates mid-teens revenue growth, with rental revenues expected to rise approximately 30% year-over-year [11]

Core Insights - Zillow Group reported strong Q4 2025 results with total revenue increasing by 18% year over year, contributing to a full-year revenue growth of 16% [8][20] - The company achieved full-year profitability with a GAAP net income of $23 million and expanded EBITDA margins by nearly 200 basis points [9][20] - Strategic initiatives include expanding the enhanced market strategy, integrating AI into their ecosystem, and rolling out Zillow Pro to support agents [10][19] Financial Performance - Q4 revenue reached $654 million, up 18% year over year, with EBITDA of $149 million and a margin of 23%, which is 260 basis points higher than the previous year [20] - For sale revenue grew 11% year over year in Q4 to $475 million, with residential revenue up 8% and mortgages revenue increasing by 39% [20] - Rentals revenue grew 45% year over year in Q4, driven by a 63% increase in multifamily revenue, reaching $168 million [20] Strategic Initiatives - The company is focusing on enhancing its market strategy, which includes integrating technology to improve the real estate transaction process for consumers and professionals [19][20] - Zillow Home Loans has seen double-digit adoption rates, contributing to strong growth in purchase originations [19][20] - The rollout of Zillow Pro is expected to help agents manage their clients more effectively and improve lead conversion [19][30] Market Position and Growth - Zillow's rental segment showed significant growth, with a 45% increase in Q4 revenue, and the company estimates its share of rental listings increased to 63% [11][20] - The company is optimistic about its long-term strategy, aiming for mid-teens revenue growth in 2026 and continued EBITDA margin expansion [13][20] - Zillow's unique position in the market is supported by a trusted brand and a large, engaged consumer audience, with 80% of traffic coming directly to the platform [19]

Financial Performance - Zillow reported GAAP profitability in 2025, with revenue growth outpacing cost growth, positioning the company for sustainable profitable growth[36]. - Residential revenue accounted for 66% of total revenue for the year ended December 31, 2025, while rentals revenue accounted for 24% of total revenue, representing 39% growth compared to the year ended December 31, 2024[81]. - As of December 31, 2025, the company had an accumulated deficit of $1.9 billion, indicating significant past operating losses[188]. - The company’s growth rate may decline in the future due to various factors, including the maturation of its business and challenges in executing its growth strategy[188]. - The company’s ability to repay its debt obligations depends on future performance and cash flow generation, which may not be sufficient[190]. Market and User Engagement - The Zillow Group portfolio attracted 259 million unique users in July 2025 and approximately 9.6 billion visits throughout the year[33]. - Zillow Rentals had 2.4 million average monthly active rental listings in 2025, a 44% increase compared to December 31, 2024[31]. - Zillow Rentals has an average of 2.4 million monthly active rental listings, including 72,000 multifamily properties, and attracted 33 million unique visitors per month in 2025[36]. - Approximately 57% of sellers are also buying at the same time, and 37% of renters planning to move within the next year intend to buy their next home[32]. Product and Service Development - Zillow's Enhanced Market experience delivered over 40% increase in leads to agent partners by the end of 2025[31]. - Zillow Home Loans achieved double-digit customer adoption rates across Enhanced Markets in 2025[34]. - In 2025, Zillow expanded its cost-transparency features across the Rentals network, providing renters with more information about move-in and monthly costs[31]. - The company aims to explore additional opportunities in home insurance, renovation services, and moving services in the future[38]. - Continuous innovation in products and services is necessary to meet customer expectations; failure to do so may lead to customer dissatisfaction and loss of market share[92]. Regulatory and Compliance Risks - The business is subject to regulatory scrutiny and potential litigation, which could result in fines, penalties, and reputational harm[72]. - Compliance with MLS rules is essential for maintaining access to listings data, and failure to comply could lead to restrictions or termination of access, impacting business operations[89]. - The company faces risks related to regulatory compliance, with potential changes in laws affecting operations and requiring additional resources for compliance[161]. - Zillow must maintain various licenses for its real estate and mortgage services, which are subject to stringent state and federal regulations[165]. - The company’s operations may be adversely affected if it fails to comply with evolving data privacy laws, leading to potential government enforcement actions and litigation[182]. Cybersecurity and Data Privacy - The company is subject to various cybersecurity threats, including phishing and ransomware attacks, which could compromise sensitive data and harm its reputation[119]. - The company relies on various vendors for processing and storing sensitive data, which introduces cybersecurity risks and vulnerabilities, potentially harming business operations and financial condition[124]. - Cybersecurity risks are inherent to the company's operations and could materially affect its business strategy and financial condition[223]. - The company has a third-party service provider management program to assess cybersecurity risks associated with third-party providers[229]. - The information security team conducts annual cybersecurity awareness training for employees to help prevent and respond to cybersecurity incidents[226]. Competitive Landscape - The company faces intense competition from various real estate service providers, which may have advantages in resources and brand recognition, potentially harming the company's market position[94]. - The ability to attract and retain real estate partners is crucial, as spending from these partners directly affects revenue generation[78]. - The company may not be able to maintain relationships with real estate listing providers, which could limit access to essential data for its services[85]. - The company’s success depends on its ability to innovate and compete effectively in a rapidly changing technological landscape[86]. Financial and Operational Risks - The business is impacted by low housing inventory, elevated mortgage interest rates, and inflationary conditions, which have affected demand for products and services[71]. - The company may face significant operating losses and may not be able to sustain or increase revenue growth or profitability over the long term[72]. - Changes in government-sponsored entities' operations could adversely affect Zillow Home Loans' liquidity and overall financial condition[142]. - The company faces challenges in proactively addressing evolving cybersecurity threats, which could result in undetected vulnerabilities being exploited[127]. - Disruptions in service on mobile apps or websites could damage the company's reputation and result in customer loss, affecting overall financial performance[132]. Intellectual Property and Acquisitions - The company holds 224 patents and has 225 pending patent applications, focusing on proprietary valuation models and data management techniques[46]. - The company relies on intellectual property protections, but challenges in safeguarding these rights could harm its competitive position and financial condition[150]. - The company is involved in disputes regarding the accuracy of its Zestimate and Rent Zestimate valuations, which could lead to costly litigation and impact its financial condition[105]. - The company has acquired Enchant, LLC, d/b/a Follow Up Boss in December 2023, as part of its strategy to evaluate potential acquisitions and investments[108]. Capital Structure and Stock Performance - Zillow's Class A common stock price ranged from $32.82 to $86.76 per share, while Class C capital stock ranged from $33.68 to $90.32 per share over the last three fiscal years[209]. - The company's capital structure concentrates voting control with founders, with Richard Barton and Lloyd Frink holding approximately 35% and 22.7% of voting power, respectively[211]. - Future sales of stock could lead to a decline in stock price, and there are no contractual restrictions on issuing additional shares, which may cause dilution[213]. - The company may face challenges in raising additional capital on acceptable terms, which could hinder growth and operational plans[200].