Zillow Group
| CURRENT PRICE | PROBABILITY-WEIGHTED FAIR VALUE | FAIR VALUE RANGE |
|---|---|---|
| $36.37 | ~$50 | $30 – $70 |
| May 2026 | Bull 25% / Base 50% / Bear 25% | Modest upside |
Verdict: ZG delivered Q1 2026 revenue of $708M (+18%), with Mortgages (+56%) and Rentals (+42%) driving the beat. Adj EBITDA of $182M was above outlook[1], and Q2 EBITDA guidance of $150-165M signals continued momentum. The bull case depends on continued housing transactions recovery and Showcase listings monetization; bear case reflects a prolonged housing freeze. Trailing P/E of 178x reflects the trough-earnings status; the company is positioned for mid-teens growth and margin expansion in 2026.
CURRENT SNAPSHOT
| Metric | Value | Notes / Source |
|---|---|---|
| Stock price | $44 | [2] |
| Q1 2026 revenue | $708M (+18%) | Adj EBITDA $182M [1] |
| Residential revenue | $450M (+8%) | [1] |
| Mortgages revenue | $64M (+56%) | [1] |
| Rentals revenue | $183M (+42%) | [1] |
| Q1 2026 EPS | $0.19 | vs $0.03 prior year [1] |
| Q2 2026 EBITDA guide | $150M – $165M | [1] |
| Trailing P/E | 178x | Trough earnings [3] |
BULL / BASE / BEAR SCENARIOS
| Scenario (weight) | Assumptions | Fair Value |
|---|---|---|
| Bull (25%) | Housing transactions recover +15%, Showcase scales, 30x EV/EBITDA | $70 |
| Base (50%) | Mid-teens revenue growth, margin expansion to 25%, 25x EV/EBITDA | $50 |
| Bear (25%) | Housing freeze continues, Rentals decel, 18x EV/EBITDA | $30 |
| Probability-weighted | Marketplace duopolist; housing cycle leverage cuts both ways. | ~$50 |
Key Risks
- Housing cycle: Transactions dependent on mortgage rates; 10Y at 4.68% keeps housing depressed.
- NAR settlement implications: Agent commission disclosure changes Zillow's monetization model.
- Showcase adoption: Premium listings monetization slower than hoped.
- Competition: Redfin, Realtor.com, CoStar all compete; portal economics evolving.
What Would Change Our View
- Upside: Mortgage rate cuts of 100bp+, Showcase ARR disclosure, housing transactions +10%+.
- Downside: Rates higher for longer, housing transactions <4M annualized, Showcase fizzles.
Sources
[1] https://www.sec.gov/Archives/edgar/data/0001617640/000161764026000038/q12026991.htm
[2] https://finance.yahoo.com/quote/ZG/
[3] https://stockanalysis.com/stocks/zg/
Disclaimer
This output is for informational and research-assistance purposes only. It does not constitute investment, legal, tax, accounting, or other professional advice, and it is not a recommendation to buy, sell, or hold any security. Verify material facts independently and consult qualified advisors before making decisions.