The case for & against
Bull & Bear analysis
Zillow Group, Inc. (NASDAQ: ZG) operates as a leading online real estate marketplace that facilitates housing transactions while evolving into a comprehensive ecosystem for home buying, selling, renting, and financing. As an influential entity in the real estate industry, Zillow is positioned at the intersection of digital technology and traditional real estate practices, leveraging technological innovation and consumer advocacy to enhance user experience and increase transparency in real estate transactions. Zillow is currently benefitting from a resurgent interest in its platform accompanied by a notable increase in consumer engagement.
Bull says
- ↑Q4 2025 revenue reached $654M (+18% YoY), EBITDA at $149M
- ↑Rentals segment generated $168M (+45% YoY); multifamily up 63%; 2026 Rentals growth ~30%
- ↑Free cash flow of $420M (+36% YoY); $1.3B cash & investments; $1.1B buybacks
- ↑Enhanced markets drove 44% of consumer connections (vs 21% prior year)
- ↑Median home cost affordability improved to 32% of household income
- ↑Strong earnings yield, growth, profitability factors; high institutional backing
Bear says
- ↓Ongoing legal costs from securities fraud suit strain EBITDA margins
- ↓Higher mortgage rates risk reducing transaction volume and core revenue
- ↓UBS cut price target from $75 to $50 over margin concerns
- ↓High short interest and extreme volatility may pressure share price
- ↓Consumer trust risk could dent user engagement and retention
- ↓Negative size scale, weak dividend yield signal structural challenges
Investment themes with ZG
Nuclear energy production and related companies
Earnings Call · Q4 2025 · Mgmt. Guidance
Transcript signals
Bull points
- Q4 2025 revenue was up 18% year-over-year to $654 million, near the top end of our outlook range. Our revenue performance, combined with effective cost management, delivered EBITDA of $149 million, near the midpoint of our outlook range.
- Importantly, as a result of these efforts, we reported positive GAAP net income in Q4 and for full year 2025.
- For Sale revenue grew 11% year-over-year in Q4 to $475 million, approximately 800 basis points above the 3% residential real estate industry growth as reported by NAR.
Bear points
- Q4 EBITDA expenses of $505 million were slightly above our outlook due to higher-than-expected legal expenses.
- We held our full year 2025 EBITDA fixed costs to approximately $1 billion, which resulted in fixed costs as a percentage of revenue declining to 41% in 2025 from 44% in 2024.
- While we controlled costs, we continue to invest for future growth.