Zillow (ZG) Stock Forecast & Price Target

Zillow Group Inc. has demonstrated significant growth in its Enhanced Markets, with connections increasing to 44% from 34% last quarter and 21% a year ago, indicating strong expansion within this segment. The Zillow Rentals marketplace continues to thrive, boasting 2.5 million active listings, an increase from 2.4 million previously, and the company reported a year-over-year EBITDA of $149 million, reflecting a 33% increase and falling within the projected guidance range. Additionally, management anticipates substantial year-over-year margin expansion for FY26, driven by effective fixed cost management and aligning variable costs with revenue growth, contributing to a positive financial outlook.

Zillow Group Inc. has provided guidance indicating potential revenue growth in the first quarter, but this is offset by an expected 8% decline in EBITDA due to an increase in legal expenses, raising concerns about profitability. The company’s fourth-quarter results reflected a slight revenue beat, but EBITDA fell short of expectations, highlighting ongoing pressures on margins primarily attributed to legal costs. Moreover, significant risks loom from a prolonged downturn in the real estate industry, potential changes in the commission structure, and increasing competition, all of which may impact Zillow's market position and long-term financial stability.