Zillow Group, Inc. shares are under pressure on Tuesday, December 16, 2025, as investors react to a sudden, very modern fear: what happens if Google decides it wants to “be the front door” to home search, not just the street sign pointing to it?
In the latest trading data available Tuesday, Zillow’s Class A shares (NASDAQ: ZG) were down roughly 8%, and the company’s Class C shares (NASDAQ: Z) were down a similar amount, extending a sharp selloff that began Monday after reports that Google is testing home listing features directly inside Search results. [1]
The market’s message is clear: Zillow’s core asset isn’t just its brand or its “Zestimate” lore—it’s attention. And when the world’s largest attention machine runs an experiment, even a small one, Wall Street pays attention.
Why Zillow stock is moving: Google’s home listing experiment spooks investors
The immediate catalyst for the drop is reporting that Google is testing real-estate listing experiences within Search, including richer home details and actions like requesting a tour or contacting an agent—features that look uncomfortably similar to what consumers typically do on Zillow and other portals. [2]
Several outlets describe the test as a limited rollout that appears to show listing information in a top-of-page carousel in certain searches, tied to a partnership involving ComeHome by HouseCanary (an IDX site) as a data partner. The experiment has been spotted in select U.S. markets and appears mobile-centric in early sightings. [3]
Even if the test is small today, investors are treating it like a preview of a bigger question: Does Google keep acting like a referee, or does it start playing striker?
That question helps explain the violent move Monday. Coverage noted Zillow shares fell hard on December 15 as the story spread, alongside declines in other online real-estate and housing-adjacent names. [4]
Analyst reaction: “headline negative,” but near-term damage may be limited
After the selloff, multiple analysts pushed back on the most extreme doomsday takes—without dismissing the long-term risk.
A key point repeated in several research notes: Zillow’s traffic mix is heavily “direct.” That means users often go straight to Zillow’s apps or websites rather than arriving via generic Google searches. In reporting that cited a Goldman Sachs note, the bank argued there’s no clear near-term hit, partly because the experiment appears limited to select markets and mobile browsers, and because Zillow’s direct traffic is a meaningful cushion—though Goldman still framed the development as a long-term risk for portals. [5]
Other firms landed in a similar “watch it, but don’t panic” zone:
- RBC Capital Markets said Zillow’s SEO exposure is small relative to mobile app usage and that the situation is “headline negative” but less likely to have a major fundamental impact, maintaining an Outperform rating and a $95 price target. [6]
- Wells Fargo argued meaningful “disintermediation” looks unlikely, comparing the dynamic to Google’s hotel meta-search model, while noting there could be some traffic acquisition cost pressure if the ecosystem shifts from organic discovery to more paid placements. Wells Fargo kept an Equal Weight stance with a $73 price target. [7]
That range of targets—roughly $73 to $95 from just a couple of major notes—captures today’s Zillow debate in miniature: Is this a temporary scare in a strong consumer brand, or an early tremor of a platform shift? [8]
What the Google test really threatens: Zillow’s funnel economics, not just “traffic”
Zillow’s business model is not a toll booth on home listings; it’s closer to a marketplace where attention turns into transactions:
- Consumers search and browse homes
- Zillow routes demand to agents, landlords, and loan officers
- Zillow monetizes through advertising, lead generation, software, rentals marketplace products, and mortgage-related revenue
A Google experiment that inserts listing detail and action buttons earlier in the journey could, in theory, pressure Zillow in two ways:
- Top-of-funnel discovery: fewer users clicking out to portals for initial browsing
- Pricing power: if portals have to buy more visibility, customer acquisition costs could rise
The counterargument (and why analysts aren’t uniformly bearish) is that Zillow has spent years building habit-forming app usage, brand awareness, and “direct” visitation—insulation Google can’t instantly delete with a UI tweak. [9]
Zillow’s fundamentals entering 2026: revenue growth, profitability, and a bigger rentals + mortgage mix
The market is debating distribution risk, but Zillow’s latest reported operating results show a company that has been improving profitability and expanding beyond its traditional agent-ad business.
In its third-quarter 2025 report (released October 30), Zillow said:
- Revenue rose 16% year over year to $676 million
- GAAP net income was $10 million
- Adjusted EBITDA was $165 million (a 24% margin)
- Cash and investments ended the quarter at about $1.4 billion
- Average monthly unique users were 250 million, with 2.5 billion visits in the quarter [10]
By segment, Zillow highlighted faster growth in areas that matter to the “housing super app” strategy:
- Mortgages revenue increased 36% to $53 million, driven by higher purchase loan origination volume
- Rentals revenue increased 41% to $174 million, with multifamily revenue growth called out as a major driver [11]
Zillow’s more recent forward-looking commentary for Q4 2025 (as summarized in analyst coverage following the Q3 release) pointed to:
- Total revenue of $645 million to $655 million
- Adjusted EBITDA of $145 million to $155 million
- Expectations for continued strength in Rentals and ongoing mortgage growth [12]
This is the fundamental backdrop that makes the Google story tricky: Zillow is not a company in retreat. It’s a company trying to scale. And scale strategies are often most vulnerable to changes in distribution.
Housing market forecast: Zillow expects modest home price gains and improving sales momentum
Zillow’s stock is tied not just to tech narratives but also to the plain reality of housing turnover: when people move, Zillow monetizes more opportunities.
In Zillow Research’s November 2025 forecast update, the company projected:
- Home values up 1.2% over the next 12 months amid soft demand and rising inventory
- Existing home sales at 4.09 million in 2025 (about 0.6% higher than 2024)
- A stronger 2026 outlook as affordability improves: 4.26 million existing home sales in 2026, a 4.3% increase year over year
- Divergence in rents: single-family rents +2.2%, while multifamily rents -0.1% amid elevated apartment supply [13]
This matters for Zillow stock because a “slow thaw” (more listings, modest price growth, slightly better affordability) is generally more supportive for Zillow’s marketplace than a frozen market where nobody wants to give up a low mortgage rate.
External data this week also reinforced a mixed housing picture: Reuters reported that U.S. homebuilder sentiment rose to an eight-month high in December, but remained below the break-even level, with builders citing affordability constraints, economic uncertainty, and rising costs. [14]
In other words: Zillow’s own forecast points to gradual improvement, but the market is still navigating high-stakes variables—rates, affordability, supply, and consumer confidence.
Other Zillow headlines investors are tracking: litigation and trust in housing data
Class-action consolidation raises legal overhang questions
Beyond the Google-driven volatility, Zillow has also been dealing with legal scrutiny tied to its mortgage and agent ecosystem.
Real Estate News reported that a federal judge approved the consolidation of two class-action lawsuits alleging illegal kickbacks and related claims connected to Zillow Home Loans and the Zillow Flex program—potentially setting up a complex, expensive legal process. [15]
Legal overhangs don’t always move stocks day to day, but they can matter when the market is already jittery about platform risk and long-term margins.
Zestimate-related research highlights Zillow’s “data moat” narrative
A separate piece of news that cuts the other way: HousingWire summarized a peer-reviewed study concluding that Zillow’s Zestimate can improve market efficiency, reporting increases in buyer surplus and seller profits in the dataset analyzed, with notable effects in lower-income areas. [16]
For investors, the takeaway isn’t “Zestimate prints money.” It’s that Zillow continues to build an argument that its data and models create defensible consumer value—useful in a world where discovery and trust are increasingly mediated by AI.
Product transparency debates: climate risk data changes
Earlier this month, The Guardian reported that Zillow removed climate risk data displays from listings after complaints that the information harmed sales, while still linking out to the underlying data provider. [17]
This kind of controversy matters because housing is uniquely high-stakes: consumers want truth, sellers want velocity, and platforms get squeezed between them.
Zillow stock forecast: what matters most from here (and what could change the narrative)
There’s no single “ZG stock forecast” that will satisfy everyone this week, because Zillow is caught between two story engines:
- Execution story: expanding rentals and mortgages, improving profitability, and building an integrated transaction ecosystem [18]
- Distribution story: Google (and AI-driven search more broadly) potentially rewiring how consumers discover listings [19]
A grounded way to think about Zillow’s next phase is to watch for concrete signals in three buckets:
1) Does Google’s experiment expand—or stall?
Key signals include whether the listing experience appears in more markets, moves beyond mobile, or becomes a consistent paid product category that portals and brokerages must bid on. Early reporting emphasizes a limited test, but markets move on direction, not just scale. [20]
2) Can Zillow keep growing in Rentals and Mortgages without “buying” growth?
Zillow’s Q3 showed strong Rentals and Mortgages growth alongside profitability improvements. Investors will be watching whether that growth remains efficient (especially if customer acquisition dynamics change). [21]
3) Does the housing market “unfreeze” in 2026?
Zillow’s own forecast calls for modest home price growth and improving sales momentum into 2026 as affordability improves. If that plays out, it’s a tailwind. If rates spike or the labor market weakens, the recovery could wobble. [22]
Next catalyst: upcoming earnings timing (estimated, not confirmed)
Several market calendars currently expect Zillow’s next earnings report around February 10, 2026 (after market), though these dates are commonly estimates until the company confirms. [23]
With the stock repricing fast on platform-risk headlines, that next update will likely matter less for a single quarter’s numbers and more for two narrative questions:
- Are Zillow’s “direct traffic” and app engagement holding up?
- Is Zillow seeing any measurable shift in lead economics, marketing efficiency, or partner demand?
Bottom line for Zillow Group stock on Dec. 16, 2025
Zillow stock’s sharp drop this week is not about one quarter of revenue. It’s about a broader market anxiety: platform dependence.
The early analyst response suggests limited immediate impact given Zillow’s direct traffic and app usage—while still acknowledging that Google’s experiments can become long-term competitive threats if they scale. [24]
Meanwhile, Zillow enters 2026 with improving profitability metrics, strong Rentals and Mortgages growth in its most recently reported quarter, and a housing-market forecast that points to a steadier (if not booming) environment ahead. [25]
References
1. www.investopedia.com, 2. www.investopedia.com, 3. www.barrons.com, 4. www.investopedia.com, 5. www.geekwire.com, 6. www.tipranks.com, 7. www.tipranks.com, 8. www.tipranks.com, 9. www.geekwire.com, 10. investors.zillowgroup.com, 11. investors.zillowgroup.com, 12. www.nasdaq.com, 13. www.zillow.com, 14. www.reuters.com, 15. www.realestatenews.com, 16. www.housingwire.com, 17. www.theguardian.com, 18. investors.zillowgroup.com, 19. www.investopedia.com, 20. www.barrons.com, 21. investors.zillowgroup.com, 22. www.zillow.com, 23. www.zacks.com, 24. www.tipranks.com, 25. investors.zillowgroup.com
