Zillow (ZG) Stock Forecast & Price Target

Zillow Group Inc. has demonstrated robust growth in its Enhanced Markets, with connections increasing significantly from 21% last year to 44%, indicating strong user engagement and market expansion. The Zillow Rentals marketplace has also shown remarkable performance, achieving 2.5 million active listings, representing a continuous upward trend that supports its competitive positioning. Moreover, the company reported a 33% year-over-year increase in EBITDA to $149 million, with expectations for healthy margin expansion driven by effective cost management strategies moving into fiscal year 2026.

Zillow Group Inc. reported a 4Q revenue of $654 million, which was slightly above prior estimates, but its EBITDA fell short by 1% due to increased legal expenses that detracted 180 basis points from EBITDA margins. Looking ahead, Zillow anticipates a negative impact from incremental legal costs, projecting an additional 200 basis points drag in 1Q and a further 100 basis points for FY26. Additionally, the company faces significant risks stemming from a potentially prolonged downturn in the real estate market, possible changes to the commission structure, and increasing competition that could threaten its market position.