Zillow
Z
$33.43
-7.40%
Zillow Group, Inc. is a real estate technology company that operates a digital platform connecting home buyers, sellers, renters, and real estate professionals with a suite of tools and services spanning the entire home journey, including shopping, financing, and closing. As a market leader in online real estate marketplaces, Zillow leverages its iconic brands like Zillow, Trulia, and StreetEasy to dominate the sector. The current investor narrative centers on the company's strategic pivot toward a 'housing super app' model, integrating its marketplace with mortgage and closing services, while navigating a challenging housing market characterized by elevated mortgage rates and geopolitical uncertainty that has pressured transaction volumes and investor sentiment, as reflected in the stock's significant decline over the past year.…
Z
Zillow
$33.43
Related headlines
Investment Opinion: Should I buy Z Today?
Rating: Hold. Zillow's forward PE of 11.33x is attractive, but the stock is in a strong downtrend, and the consensus rating is Hold with an average target of $55.83, implying 64% upside. The thesis is that Zillow's revenue growth and potential for margin expansion will eventually be recognized, but the timing is uncertain.
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Z 12-Month Price Forecast
The AI assessment is neutral, reflecting the balance between attractive valuation and significant operational risks. The low forward PE and strong revenue growth are positive, but the negative operating margin and high beta create uncertainty. If the company can achieve positive operating margins and maintain growth, the stance would upgrade to bullish. Conversely, if growth decelerates or margins worsen, a bearish stance would be warranted.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Zillow's 12-month outlook, with a consensus price target around $54.17 and implied upside of +62.0% versus the current price.
Average Target
$54.17
0 analysts
Implied Upside
+62.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$37 - $76
Analyst target range
The wide target range of $37 to $76 highlights significant uncertainty about Zillow's future, with the high target assuming a successful execution of the housing super app strategy and a recovery in the housing market, while the low target prices in continued margin pressure and competitive losses. Recent institutional ratings have been stable, with no downgrades or upgrades in the past few months, as firms like Jefferies and JP Morgan maintain their Buy/Overweight ratings, while Keefe, Bruyette & Woods and Needham hold at Market Perform/Hold. The limited analyst coverage (6 analysts) suggests that Zillow is a mid-cap stock with moderate institutional interest, which can lead to higher volatility and less efficient price discovery. The consensus 'Hold' rating and the wide target spread indicate that analysts are divided on the stock's prospects, and investors should weigh the potential upside against the significant risks.
Bulls vs Bears: Z Investment Factors
Zillow presents a classic high-risk, high-reward scenario. The bull case is anchored by accelerating revenue growth, a low forward PE, and strong gross margins, while the bear case is driven by a steep price decline, extreme trailing valuation, and negative operating margins. Currently, the bearish evidence is stronger given the stock's persistent downtrend and the challenging housing market, but the low forward PE and analyst targets suggest potential upside if the company executes on its super app strategy. The most critical tension is whether Zillow can translate its revenue growth into sustained profitability, as the market's expectations for earnings expansion are extremely high.
Bullish
- Revenue growth accelerating: Q1 2026 revenue grew 18.39% YoY to $708M, up from $598M in Q1 2025, with sequential increases from $654M in Q4 2025 and $676M in Q3 2025. This acceleration indicates strong demand for Zillow's marketplace and rental services despite housing market headwinds.
- Forward PE of 11.33x is compelling: The forward PE of 11.33x is remarkably low for a tech company, suggesting the market expects significant earnings growth. With analyst estimated EPS of $6.095 for the next year, the stock trades at a substantial discount to its growth potential.
- Strong gross margin of 74.1%: Gross margin stands at 74.1%, reflecting the scalability of Zillow's digital platform. This high margin provides a solid foundation for profitability as revenue scales, with Q1 2026 gross profit of $519M on $708M revenue.
- Positive net income and FCF: Q1 2026 net income was $46M, a significant improvement from $8M in Q1 2025, and free cash flow TTM is $431M. This demonstrates the company's ability to generate cash and fund growth initiatives without relying on external capital.
Bearish
- Stock down 57% in past year: Zillow's stock has declined 57.18% over the past year, from a 52-week high of $93.88 to $34.06, with a max drawdown of -67.44%. This severe underperformance reflects persistent selling pressure and deteriorating investor sentiment.
- Trailing PE of 717x is extreme: The trailing PE of 717.46x indicates that current earnings are minuscule relative to the stock price, making the stock vulnerable to any earnings disappointment. The market is pricing in a massive earnings recovery that may not materialize.
- Operating margin is negative: Operating margin was -1.24% in Q1 2026, with operating income of $36M on $708M revenue, but the trailing twelve-month operating margin is negative. High operating expenses, including $150M R&D and $210M S&M, continue to pressure profitability.
- High beta of 1.95 amplifies risk: With a beta of 1.95, Zillow is highly sensitive to market movements, meaning it falls faster in downturns. This amplifies downside risk in a volatile macro environment, as evidenced by its underperformance relative to the S&P 500.
Z Technical Analysis
The prevailing price trend for Zillow is a sustained downtrend, with the stock currently trading at $34.06, down 57.18% over the past year. This places the stock at 36.3% of its 52-week range (current price of $34.06 relative to the 52-week low of $29.23 and high of $93.88), indicating it is near the lower end of its range, which often suggests either a value opportunity or a falling knife. The stock's 52-week high of $93.88 was set in the past year, but the subsequent decline has been steep, with a max drawdown of -67.44%, underscoring the severity of the bearish trend.
Beta
1.98
1.98x market volatility
Max Drawdown
-67.4%
Largest decline past year
52-Week Range
$29-$94
Price range past year
Annual Return
-60.8%
Cumulative gain past year
| Period | Z Return | S&P 500 |
|---|---|---|
| 1m | +2.0% | +2.8% |
| 3m | -19.3% | +4.2% |
| 6m | -39.2% | +11.3% |
| 1y | -60.8% | +21.5% |
| ytd | -49.3% | +12.7% |
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Z Fundamental Analysis
Zillow's revenue trajectory is showing robust growth, with the most recent quarter (Q1 2026) reporting revenue of $708 million, a 18.39% year-over-year increase. This marks an acceleration from prior quarters, as revenue grew from $598 million in Q1 2025 to $654 million in Q4 2025, and $676 million in Q3 2025, indicating a steady upward trend. The growth is driven by the Residential and Rental segments, with Residential revenue at $450 million and Rental revenue at $183 million, while the Sales segment contributed $514 million, reflecting the company's diversified revenue streams. This growth trajectory is a positive signal for the investment case, suggesting that Zillow's core marketplace and rental businesses are expanding despite a challenging housing market.
Quarterly Revenue
$708000000.0B
2026-03
Revenue YoY Growth
+18.4%
YoY Comparison
Gross Margin
73.3%
Latest Quarter
Free Cash Flow
$431000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is Z Overvalued?
Given that Zillow's net income is positive (net income of $46 million in Q1 2026), the PE ratio is the primary valuation metric. The trailing PE is 717.46x, while the forward PE is 11.33x, indicating that the market expects a dramatic earnings expansion in the coming year. This wide gap between trailing and forward PE suggests that the market is pricing in a significant recovery in profitability, likely driven by the company's growth initiatives and operational leverage. The forward PE of 11.33x is remarkably low for a tech company, which could indicate either undervaluation or skepticism about the sustainability of future earnings.
PE
717.5x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 52x~1376x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
48.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are significant. Zillow's trailing PE of 717x and negative operating margin of -1.24% indicate that profitability is fragile, with net income of just $46M in Q1 2026 on $708M revenue. The company's debt-to-equity ratio is low at 0.11, but its reliance on continued revenue growth to justify valuation is a key risk. If growth decelerates, the stock could face severe de-rating, as seen in its 67% drawdown from the 52-week high.
FAQ
The key risks include: 1) Financial risk: negative operating margins and high trailing PE, 2) Market risk: high beta of 1.95 and sensitivity to mortgage rates, 3) Competitive risk: intense competition in the real estate marketplace, 4) Company-specific risk: execution risk of the super app strategy. The most severe risk is a prolonged housing market downturn, which could lead to revenue deceleration and further stock declines.
The 12-month forecast is uncertain. The bull case targets $55-$76 with a 25% probability, the base case targets $40-$55 with a 50% probability, and the bear case targets $29-$37 with a 25% probability. The most likely scenario is the base case, where the stock trades in a range, with the average analyst target of $55.83 as a potential upside.
On a forward basis, Zillow appears undervalued with a forward PE of 11.33x, which is low for a tech company. However, the trailing PE of 717x indicates that current earnings are minimal, and the market is pricing in significant future growth. Compared to peers, the PS ratio of 6.39x is moderate. The valuation implies that the market expects a major earnings recovery, which may or may not materialize.
Zillow is a high-risk, high-reward stock. With a forward PE of 11.33x and analyst average target of $55.83, there is potential upside of 64% from the current price of $34.06. However, the stock is in a downtrend, and the consensus rating is Hold. It could be a good buy for investors who believe in the company's long-term strategy and can tolerate volatility, but it is not suitable for risk-averse investors.
Zillow is more suitable for long-term investment, given its high beta and volatility. The company is in a growth phase, and its super app strategy may take years to play out. Short-term trading is risky due to the stock's sensitivity to market sentiment and housing data. A minimum holding period of 3-5 years is recommended to allow the strategy to unfold.