Zillow (ZG) Stock Forecast & Price Target

Zillow Group is viewed positively because its Preferred monetization model is gaining traction, with connection penetration tracking toward 75% to 80% by year-end and implied revenue per connection running materially above the legacy model, while Zillow Home Loans adds a structurally advantaged, near-zero acquisition-cost revenue stream. The company also appears well positioned in Rentals, where multifamily upsell opportunity remains substantial, AI-driven engagement is rising, and recent results showed 2025 revenue of approximately $2.58 billion alongside 2Q consolidated revenue of $772 million and EBITDA of $176 million. Despite a tougher macro backdrop and near-term transition noise, the outlook remains constructive because management sees no meaningful AI disruption, legal overhangs look non-systemic, and the platform’s integrated consumer-agent workflow continues to support stronger long-term monetization.

Zillow Group is facing a weak housing backdrop as mortgage-to-income remains around 34%, still above the ~30% level needed for meaningful transaction recovery, while softer high-end demand signals that the macro is worsening rather than improving. Core residential growth is pressured by depressed inventory and transaction volumes, and the shift to Preferred is likely to reduce near-term For Sale growth by 400-600 bps because of revenue-recognition timing and seasonality changes. With 3Q total revenue guided at $745M-$760M and 3Q adjusted EBITDA at $180M-$200M below expectations, alongside 2027 revenue and EBITDA cuts, the outlook reflects limited visibility, execution risk, and weaker margin expansion.