Zillow Group, Inc. (ZG) Stock Analysis and Metrics

Zillow

NASDAQ: ZG

$33.70 ▼ -0.29 (-0.85%)

At close: Jul 17, 2026 · 3:59 PM UTC

Financial Ratios

ROIC (Qtr)0.00

Total Debt (Qtr)335.00 Mn

Revenue Growth (1y) (Qtr)18.39

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About

Zillow Group, Inc. operates an online residential real estate marketplace that connects consumers with real estate agents loan officers and rental listings. The company provides tools such as the Zestimate home valuation model advertising services and mortgage origination to support users throughout the buying selling renting and financing process.

Zillow Group, Inc. generates revenue primarily from advertising sales to real estate professionals and brands from mortgage interest and fees earned by Zillow Home Loans and from rental marketplace services including subscription fees and advertising to landlords and property managers. The company also earns income from transaction related products such as premium listing enhancements and software solutions for agents.

Zillow Group, Inc. is the most visited residential real estate website and app in the United States giving it a strong brand advantage over competitors such as Realtor.com Redfin and Trulia. The company’s living database of approximately 173 million U. S. homes and its proprietary valuation models provide differentiated data that competitors cannot easily replicate. Zillow Group, Inc. also operates the largest nationwide rental marketplace with millions of active listings which attracts both renters and property managers seeking broad exposure. Strategic partnerships with thousands of agents brokers mortgage lenders and property management software providers enhance its ecosystem and create network effects. An experienced management team and a solid financial position further support its ability to invest in technology and grow market share.

Zillow Group, Inc. serves a diverse customer base that includes individual home buyers sellers and renters seeking information and transaction support. Real estate agents brokers and teams use the platform to acquire leads advertise listings and access productivity tools. Mortgage borrowers obtain financing options through Zillow Home Loans or the company’s mortgage marketplace. Landlords and property managers rely on Zillow Rentals to list vacancies screen applicants collect payments and manage leasing activities.

Investment Thesis

▲ Bull case

Zillow’s rental business is on a clear multi year path to exceed $1 billion in annual revenue, driven by a steady increase in multifamily properties and long tail listings that together provide a one stop shop for renters.In Q1 FY26 the platform added 21 thousand multifamily properties bringing the total to 76 thousand, a 38% increase year over year, while long tail listings rose to 2.7 million average monthly active listings.Property managers cite Zillow as delivering the highest return on marketing investment compared with other digital channels, which fuels wallet share gains and supports a 30% full year revenue growth target for 2026.The compounded annual growth rate of the rental segment since 2022 exceeds 30%, indicating that the current momentum is structural rather than cyclical.
The company’s AI Mode feature, already live for 5% of users, is generating deeper conversations and more actionable engagement than traditional search, signaling a future where AI driven personalization lifts conversion across the housing journey.This early traction is reinforced by Zillow’s unique advantages of comprehensive content, deep user context and end to end integration, which together allow the platform to anticipate consumer needs and connect them with agents, loan officers and closing services in a seamless flow.Internally, the shift to an AI native operating model has boosted engineer productivity, with teams delivering 40% more code per person at equal or higher quality, accelerating product innovation cycles.Complementary products such as Zillow Preview and Showcase are seeing rapid adoption, with Preview onboarding over 60 brokerages in two months and Showcase usage rising to 4.3% of new listings, both of which enhance agent effectiveness and create a virtuous loop of higher conversion and increased revenue.
Zillow Home Loans continues to outpace industry growth, with purchase loan origination volume up 96% year over year to $1.5 billion, securing a top 25 national lender ranking and demonstrating a strong value proposition that combines competitive rates with fast processing and free appraisals.The mortgage segment benefits from the platform’s integrated ecosystem, as buyers who obtain preapproval through Zillow are more likely to engage with preferred agents and close transactions, creating a cross sell opportunity that raises the lifetime value of each loan.Although current mortgage margins are modest, the business enjoys a structural advantage in customer acquisition cost because leads are generated organically through Zillow’s traffic and AI driven tools, leaving ample room for margin expansion as scale increases.Management’s outlook for continued double digit mortgage origination growth supports the broader thesis that the company can capture additional profit pools beyond its core advertising and subscription revenues.

Zillow’s rental business is on a clear multi year path to exceed $1 billion in annual revenue, driven by a steady increase in multifamily properties and long tail listings that together provide a one stop shop for renters.In Q1 FY26 the platform added 21 thousand multifamily properties bringing the total to 76 thousand, a 38% increase year over year, while long tail listings rose to 2.7 million average monthly active listings.Property managers cite Zillow as delivering the highest return on marketing investment compared with other digital channels, which fuels wallet share gains and supports a 30% full year revenue growth target for 2026.The compounded annual growth rate of the rental segment since 2022 exceeds 30%, indicating that the current momentum is structural rather than cyclical.
The company’s AI Mode feature, already live for 5% of users, is generating deeper conversations and more actionable engagement than traditional search, signaling a future where AI driven personalization lifts conversion across the housing journey.This early traction is reinforced by Zillow’s unique advantages of comprehensive content, deep user context and end to end integration, which together allow the platform to anticipate consumer needs and connect them with agents, loan officers and closing services in a seamless flow.Internally, the shift to an AI native operating model has boosted engineer productivity, with teams delivering 40% more code per person at equal or higher quality, accelerating product innovation cycles.Complementary products such as Zillow Preview and Showcase are seeing rapid adoption, with Preview onboarding over 60 brokerages in two months and Showcase usage rising to 4.3% of new listings, both of which enhance agent effectiveness and create a virtuous loop of higher conversion and increased revenue.
Zillow Home Loans continues to outpace industry growth, with purchase loan origination volume up 96% year over year to $1.5 billion, securing a top 25 national lender ranking and demonstrating a strong value proposition that combines competitive rates with fast processing and free appraisals.The mortgage segment benefits from the platform’s integrated ecosystem, as buyers who obtain preapproval through Zillow are more likely to engage with preferred agents and close transactions, creating a cross sell opportunity that raises the lifetime value of each loan.Although current mortgage margins are modest, the business enjoys a structural advantage in customer acquisition cost because leads are generated organically through Zillow’s traffic and AI driven tools, leaving ample room for margin expansion as scale increases.Management’s outlook for continued double digit mortgage origination growth supports the broader thesis that the company can capture additional profit pools beyond its core advertising and subscription revenues.

▼ Bear case

Legal expenses are expected to remain a notable headwind, with approximately $20 million of incremental costs projected for Q2 FY26 and a similar run rate anticipated through the first half of the year as the company navigates an ongoing FTC trial, which could suppress EBITDA margins if the outcome leads to higher settlements or ongoing compliance spending.Advertising spend is being front loaded, with an incremental $16 million year over year in Q2 FY26 tied to timed product launches, and this elevated outlay may offset gross profit gains from revenue growth until the spending pattern normalizes in the second half.While management expects these items to become less material later in 2026, any prolongation of the legal dispute or a shift toward a more aggressive advertising strategy could keep pressure on profitability and delay the anticipated margin expansion.Investors should watch for any updates on legal reserves or advertising efficiency that could signal a longer lasting drag on earnings.
The company’s guidance assumes the housing market will remain effectively flat for the remainder of 2026, which limits upside from traditional residential transaction volume and places greater reliance on the mortgage and rental segments to drive top line growth.While mortgage origination volume is surging, the segment currently operates at low margins and faces intense competition from established banks and fintech lenders that could impede further share gains or compress pricing power.If residential activity does not recover as hoped, the overall revenue growth may fall short of the mid teens target, forcing the company to lean more heavily on high cost growth initiatives such as AI product rollouts and expanded sales force.This scenario would raise concerns about the sustainability of earnings expansion and could lead to a reassessment of the growth premium embedded in the stock price.
The success of Zillow’s integrated strategy hinges on widespread adoption of products such as Preview, Showcase and Follow Up Boss, yet early metrics show only 4.3% of new listings using Showcase and Preview still in the early onboarding phase with broker participation, indicating that conversion benefits may take longer to materialize than management anticipates.Competitors are accelerating their own AI driven search and transaction tools, which could erode Zillow’s contextual data advantage if they succeed in replicating the depth of user behavior insights that the platform currently enjoys.Additionally, the company’s reliance on agent relationships through its CRM and preferred agent networks creates a vulnerability if large brokerages decide to shift allegiance to alternative platforms offering comparable technology at lower cost.Any shortfall in product uptake or a shift in partner loyalty would directly impact the anticipated uplift in conversion rates and could keep revenue growth below expectations.

Legal expenses are expected to remain a notable headwind, with approximately $20 million of incremental costs projected for Q2 FY26 and a similar run rate anticipated through the first half of the year as the company navigates an ongoing FTC trial, which could suppress EBITDA margins if the outcome leads to higher settlements or ongoing compliance spending.Advertising spend is being front loaded, with an incremental $16 million year over year in Q2 FY26 tied to timed product launches, and this elevated outlay may offset gross profit gains from revenue growth until the spending pattern normalizes in the second half.While management expects these items to become less material later in 2026, any prolongation of the legal dispute or a shift toward a more aggressive advertising strategy could keep pressure on profitability and delay the anticipated margin expansion.Investors should watch for any updates on legal reserves or advertising efficiency that could signal a longer lasting drag on earnings.
The company’s guidance assumes the housing market will remain effectively flat for the remainder of 2026, which limits upside from traditional residential transaction volume and places greater reliance on the mortgage and rental segments to drive top line growth.While mortgage origination volume is surging, the segment currently operates at low margins and faces intense competition from established banks and fintech lenders that could impede further share gains or compress pricing power.If residential activity does not recover as hoped, the overall revenue growth may fall short of the mid teens target, forcing the company to lean more heavily on high cost growth initiatives such as AI product rollouts and expanded sales force.This scenario would raise concerns about the sustainability of earnings expansion and could lead to a reassessment of the growth premium embedded in the stock price.
The success of Zillow’s integrated strategy hinges on widespread adoption of products such as Preview, Showcase and Follow Up Boss, yet early metrics show only 4.3% of new listings using Showcase and Preview still in the early onboarding phase with broker participation, indicating that conversion benefits may take longer to materialize than management anticipates.Competitors are accelerating their own AI driven search and transaction tools, which could erode Zillow’s contextual data advantage if they succeed in replicating the depth of user behavior insights that the platform currently enjoys.Additionally, the company’s reliance on agent relationships through its CRM and preferred agent networks creates a vulnerability if large brokerages decide to shift allegiance to alternative platforms offering comparable technology at lower cost.Any shortfall in product uptake or a shift in partner loyalty would directly impact the anticipated uplift in conversion rates and could keep revenue growth below expectations.

Segments Breakdown of Revenue (2025)

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Research Tools

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About

Investment Thesis

Product and Service Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer Comparison

Research Tools

Developers

About

Investment Thesis

Product and Service Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer Comparison

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