Start here if you're new
what it is
Zillow helps you search homes, rentals, and mortgages, then sells your attention to housing professionals.
how it gets paid
Last year Zillow made $2.6B in revenue.
why it's growing
Revenue grew 15.5% last year. The key number was 74.6% gross margin, because it shows Zillow's problem is not demand quality but converting that demand into durable operating profit.
what just happened
Zillow posted $0.39 in quarterly EPS, above the $0.02 consensus figure provided here, while revenue reached about $654M.
At a glance
B+ balance sheet — decent shape, but not bulletproof
25/100 earnings predictability — expect surprises
685.3x trailing p/e — you're paying up for this one
2.0% return on capital — nothing to write home about
xvary composite: 35/100 — weak
What they do
Zillow helps you search homes, rentals, and mortgages, then sells your attention to housing professionals.
You go to Zillow because the listings, photos, and estimates are already there. Then agents, lenders, and landlords show up because you are there. That loop is the moat: Zillow did $2.6B in annual revenue with a 74.6% gross margin (gross margin → money left after direct costs → the platform is cheap to run once traffic arrives).
How they make money
$2.6B
annual revenue · their business grew +15.5% last year
total revenue
$2.6B
+15.5%
The products that matter
rental listings and lead marketplace
Zillow Rentals
70% of sales
segment disclosure here is thin, but rentals account for 70% of sales inside a $2.6B revenue company. That's the business line you should care about most.
core engine
agent, touring, and mortgage bundle
enhanced markets
2026 rollout focus
management is expanding this bundled approach in 2026. The data here is early, so for now it matters more as a margin story than a reported revenue line.
execution watch
Key numbers
$4.0B
2028 revenue
Sales are $2.6B today, so the plan needs about $1.4B more by 2028. That is roughly 54% growth, and the stock is already acting like you get it.
685.3x
trailing p/e
P/E → price divided by profit → you are paying 685 years of trailing earnings for one share, which means the current earnings base barely matters.
74.6%
gross margin
Gross margin → money left after direct costs → the platform economics are strong, so Zillow's real problem is turning traffic into operating profit.
1.3%
operating margin
Operating margin → profit after running the business → despite the strong gross margin, Zillow still loses money at the operating line.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 4 — safer than 20% of stocks
- price stability 15 / 100
- net profit margin 3.3% — keeps 3 cents of every dollar in revenue
- return on equity 2% — $0.02 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in Z 3 years ago → it's now worth $15,770.
The index would have given you $14,770.
source: institutional data · total return
What just happened
missed estimates
Zillow posted $0.39 in quarterly EPS, above the $0.02 consensus figure provided here, while revenue reached about $654M.
Quarterly revenue was about $654M versus expectations near $650.4M, and annual revenue reached $2.6B, up 15.5%. Gross margin stayed fat at 74.6%, which means the platform still monetizes attention well even in a slow housing market.
$654M
revenue
$0.39
eps
74.6%
gross margin
the number that mattered
The key number was 74.6% gross margin, because it shows Zillow's problem is not demand quality but converting that demand into durable operating profit.
-
zillow group likely posted decent results to close out the year. (results for the 2025 fourth quarter were due shortly after this issue went to press.) management’s fourth-quarter outlook called for revenue of $645 million to $655 million, up 17% at the midpoint, with for sale growth in the high single digits and rentals growth accelerating to above 45% (helped by multifamily).
-
with the september quarter already showing 16% revenue growth and a return to profitability (net income of $10 million), we would expect the december period to remain profitable as well, albeit with normal seasonal slowing in home sales activity.
-
business prospects look constructive this year, even if the housing market stays sluggish.management expects 2026 to resemble the past two years in growth and profit improvement, with rentals again a key driver.
-
zillow is also expanding its ″enhanced markets″ approach (bundling agent, touring, and mortgage services), which represented 34% of connections in the september quarter, and is rolling out zillow pro more broadly in 2026.
-
these are expected to help drive a modest top-line benefit this year.with fixed costs largely controlled and stockbased compensation declining, operating leverage should remain meaningful.
source: company earnings report, 2026
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What could go wrong
the #1 risk is housing-market stagnation keeping Zillow's high-intent transaction funnel weak.
high
housing activity stays sluggish
If buyers and sellers stay frozen, Zillow has fewer chances to monetize agent connections, touring, and mortgage leads.
pressure point: growth depends on engagement turning into transactions
med
rentals concentration
Rentals drive 70% of sales. That's a strength until it isn't. A slowdown there would hit the biggest part of the story all at once.
exposure: 70% of sales tied to one business line
med
margin story never arrives
Quarterly net margin was 1.5% and full-year net margin was 1.7%. That leaves very little room for execution misses or weaker ad demand.
profit cushion: about 1–2 cents kept on each revenue dollar
with rentals driving 70% of sales and net margin at 1.7%, Zillow does not need a collapse to feel pain. It just needs growth to slow before profitability gets real.
source: institutional data · regulatory filings · risk analysis
Pay attention to
trend
watch whether revenue growth still outruns the housing market
Zillow grew 15.5% last year. If that pace holds while housing stays sluggish, the platform model is doing real work.
metric
track rentals concentration
Rentals are 70% of sales. That's the number carrying most of the current investment case.
calendar
next earnings need more than another tiny profit
Last quarter's $0.04 EPS got Zillow back to positive earnings. You want to see that build, not reset.
risk
enhanced markets have to improve monetization
Bundling agent, touring, and mortgage services sounds good. The proof is whether 1.5%–1.7% margins start moving higher.
Analyst rankings
short-term outlook
bottom 5%
momentum score 5 — the lowest rating. in human-speak, analysts think this could lag badly in the near term.
risk profile
below average
stability score 4. That means more volatility than most stocks — not chaos, but not comfort either.
chart momentum
top 20%
technical score 2. The chart looks better than the underlying fundamentals do right now.
earnings predictability
25 / 100
earnings are hard to model here. Small profits mean small misses can look dramatic.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 271 buyers vs. 194 sellers in 3q2025. total institutional holdings: 0.2B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$47
$123
$69
current price
$85
target midpoint · +24% from current · 3-5yr high: $115 (+70% · 14% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
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