Z Should I Buy
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Zillow Group Inc. (Z) is not a strong buy at the moment for a beginner investor with a long-term strategy. Despite some positive developments, such as the removal of antitrust litigation overhang and a pre-market price increase, the company's weak financial performance, ongoing legal investigations, and bearish technical indicators suggest caution. Holding the stock might be a better approach until clearer positive momentum or financial improvements emerge.
The MACD is positive and expanding, indicating bullish momentum. However, the RSI is neutral, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5), suggesting a downward trend. The stock is trading near resistance levels (R2: 45.12), which may limit further upside in the short term.
Removal of antitrust litigation overhang, allowing Zillow to enforce its private listings ban.
Analysts like JPMorgan view the recent selloff as an overreaction and see strong fundamentals.
Potential AI summit on March 24 to showcase the company's defensible moat against AI disruption.
Ongoing legal investigations by Rosen Law Firm and Schall Law Firm for potentially misleading business information and securities violations.
Weak financial performance in Q4 2025, with a significant drop in net income (-105.77%) and EPS (-104.55%).
Bearish technical indicators and resistance near current price levels.
In Q4 2025, revenue increased by 18.05% YoY to $654 million, but net income dropped significantly by -105.77% YoY to $3 million. EPS also declined by -104.55%, and gross margin fell by 4.00% to 72.78%. These metrics indicate weak profitability and efficiency trends.
Analysts have mixed ratings. Keefe Bruyette maintains a Market Perform rating with a $60 price target, citing ongoing risks from Compass's off-MLS strategies. JPMorgan views the recent selloff as a buying opportunity, citing strong fundamentals and potential from the upcoming AI summit. Benchmark has a Buy rating with a $110 price target, highlighting historical entry points in the $60 range.
