Zillow (ZG) Stock Forecast & Price Target

Zillow Group is supported by a strong competitive position in real estate, with 77% of category visitors in 3Q and 215M average monthly unique users despite a down market, while its direct traffic mix and AI Mode engagement suggest durable consumer demand. Its fundamental growth drivers are expanding beyond cyclical residential activity, as Rentals grew 26% Y/Y to $220M and seller tools are becoming a meaningful revenue stream, with Showcase, listing media, and agent-partner transactions expected to contribute $300M+ of 2026 revenue. Although mortgage-rate pressure weighed on 4Q and full-year2026 guidance, the Preferred transition is improving monetization, cash and investments of $707M plus no debt provide flexibility, and the stock’s ~7.1x 2027E EBITDA valuation leaves room for rerating as the macro improves.

Zillow Group is facing a weaker housing market, greater interest-rate sensitivity, and softer traffic that have reduced near-term visibility and pushed catalysts out through at least 1H27E. Its 3Q results were weaker than expected, with residential revenue down 4% y/y and mortgages up 32% but still below prior guidance, while average monthly unique users fell 3% y/y and visits fell 5%, underscoring pressure on funnel health and monetization. The Preferred transition should support long-term strategy, but it shifts revenue toward transaction-dependent recognition and delays cleaner growth until 2028E, while lower 2026E-2028E revenue and EBITDA estimates reflect a more challenging housing environment.