Zillow (ZG) Stock Forecast & Price Target

Zillow Group is attractive because it combines category dominance with improving monetization across the full home journey, while operating leverage remains compelling given near-zero customer acquisition costs in its mortgage business and an estimated 20-point margin advantage versus traditional originators. Its 2Q’26 results showed $772M of revenue and $176M of adjusted EBITDA, supported by 18% consolidated growth, 31% Rentals growth, and 75% Mortgages growth, while AI Mode and Zillow Pro are raising engagement and helping agents convert more leads into transactions. The long-term outlook is further strengthened by a large Rentals upsell opportunity, with about 79,000 multifamily properties on-platform and management expecting Preferred penetration to exceed 75% by the end of 2026, which should lift revenue per connection and deepen high-margin ecosystem revenue.

Zillow Group is facing a weak housing backdrop, with mortgage-to-income still around 34% versus the ~30% level needed for meaningful volume recovery, while inventory and transaction activity remain depressed and high-end demand is softening. Its core residential business is under pressure as Premier Agent growth slows, preferred-model revenue recognition shifts 6 to 12 months later, and 3Q revenue guidance of $745M-$760M and adjusted EBITDA of $180M-$200M came in below expectations. Even though Preferred and Rentals support longer-term monetization, the transition is creating a near-term “air gap” in estimates, and rising rates, inflation, or lower realtor ad budgets could further compress profitability and cash generation.