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 focus. The stock is currently underperforming with bearish technical indicators, declining financial performance, and mixed analyst sentiment. While there are some positive catalysts like new features and partnerships, these are overshadowed by legal expenses and a challenging housing market. It is advisable to hold off on investing until there are clearer signs of recovery or stronger upward momentum.
The technical indicators suggest a bearish trend. The MACD is positive but contracting, RSI is neutral at 34.872, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading below key support levels, with S1 at 41.866 and S2 at 40.668, indicating potential further downside.
Zillow launched a new AI feature to enhance user experience, set ambitious financial targets, and became the official real estate partner of Major League Baseball, which could boost brand visibility.
The housing market remains challenging, with legal expenses weighing on EBITDA. Analysts have lowered price targets, and the stock is underperforming in a tough macroeconomic environment.
In Q4 2025, revenue grew by 18.05% YoY to $654 million, but net income dropped by -105.77% YoY to $3 million. EPS also declined by -104.55% YoY to 0.01, and gross margin fell by 4.00% YoY to 72.78%.
Analyst sentiment is mixed. Several firms have lowered price targets, with most maintaining Neutral ratings. Some analysts acknowledge operational progress, but legal expenses and a tough housing market are significant concerns.
