ZG Should I Buy
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Zillow Group Inc is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has positive catalysts such as a significant share buyback program and revenue growth, the mixed financial performance, bearish technical indicators, and lack of strong trading signals suggest that waiting for a more favorable entry point would be prudent.
The MACD is positive and expanding, indicating bullish momentum, but the RSI is neutral at 49.253, showing no clear trend. Moving averages are bearish (SMA_200 > SMA_20 > SMA_5), and the stock is trading near its pivot level of 45.437. Key resistance levels are at 48.241 and 49.973, while support levels are at 42.633 and 40.901.
The company announced a $1.25 billion stock repurchase program, signaling confidence in its long-term financial stability. Additionally, revenue increased by 16% in the latest earnings report, with residential real estate up 8%.
Net income dropped significantly (-105.77% YoY), and EPS fell by -104.55% YoY. Gross margin also declined by 4%. Analysts have lowered price targets, citing legal expenses and a challenging housing market. Technical indicators suggest bearish trends, and the stock has a high probability of declining further in the short term.
In Q4 2025, revenue increased by 18.05% YoY to $654 million. However, net income dropped to $3 million (-105.77% YoY), and EPS fell to 0.01 (-104.55% YoY). Gross margin decreased to 72.78%, down 4% YoY.
Analysts have mixed views. Several firms, including Citi and UBS, maintain a Buy rating but have lowered price targets. Others, such as Susquehanna and Goldman Sachs, have Neutral ratings, citing challenges in the housing market and legal expenses. The consensus reflects cautious optimism but highlights near-term headwinds.
