Zillow Stock Soars on Rental Boom and AI Buzz: Latest Earnings, Analyst Takes, and 2025 Outlook

Stock Performance: Zillow Group’s Class C shares (NASDAQ: Z) closed at $74.98 on Oct 31, 2025, jumping +4.55% in a single day after earnings ^[1]. Despite this post-earnings pop, the stock was down ~2% over the past 5 trading days and about -2.2% for the month ^[2], essentially flat year-over-year. Zillow’s 52-week range spans $57.51 – $93.88, reflecting broader housing market volatility.
Q3 2025 Earnings Beat:Third-quarter 2025 revenue came in at $676 million (up 16% YoY), topping consensus estimates (~$669M) ^[3]. Adjusted EPS was $0.44, a hair below Zacks’ $0.45 estimate ^[4] but up ~26% from last year. The Premier Agent (“For Sale”) business grew 10% to $488M, Rentals revenue surged 41% to $174M, and Mortgages jumped 36% to $53M ^[5]. Adjusted EBITDA hit $165M (24% margin), expanding ~200 bps YoY ^[6] as Zillow controlled costs. GAAP net income was $10M (1% margin), swinging to a modest profit ^[7] ^[8].
Earnings Call Highlights: Zillow outperformed a slumping housing market, with revenue growth far above the industry’s ~5% transaction volume rise ^[9]. CEO Jeremy Wacksman lauded the results: “Zillow’s Q3 shows how well we’re delivering on our mission to make buying, selling, financing and renting easier” ^[10]. Notably, rental demand is a major tailwind – multifamily rental ad revenue jumped 62% YoY ^[11]. Executives struck an optimistic tone on AI-driven product innovation and integrated transactions, even as they acknowledged a “loud” environment of housing market pessimism and regulatory scrutiny ^[12].
Recent Developments (Late Oct 2025): Zillow’s Q3 report (released Oct 30) was the big news, driving the stock’s late-week rally. In the same week, Benchmark Capital reiterated a “Buy” rating with a $95 price target, praising Zillow’s margin expansion and calling the stock “particularly attractive at current levels” ^[13] ^[14]. Other analysts reacted to the earnings beat: Goldman Sachs raised its target to $78 (Neutral), Cantor Fitzgerald held at Neutral ($74 PT), and UBS trimmed its PT to $92 (Buy) while still projecting ~15% annual revenue growth through 2026 ^[15]. Meanwhile, the FTC filed an antitrust suit in October alleging an illegal agreement between Zillow and Redfin in the rentals market – a charge Zillow vehemently denies ^[16] ^[17]. This regulatory overhang is an emerging wildcard for Zillow’s rentals business.
Company Fundamentals: Zillow is on track for mid-teens revenue growth in 2025 and expects to remain GAAP-profitable for the full year ^[18]. It ended Q3 with a strong balance sheet: $1.4 billion in cash/investments vs. no long-term debt ^[19] ^[20]. Traffic to Zillow’s platforms hit 250 million average monthly users in Q3 (+7% YoY) ^[21], reinforcing its status as the #1 real estate portal. However, operating costs are rising – cost of revenue jumped 32% on lead acquisitions and ad spend to fuel growth, especially in rentals ^[22]. Still, Zillow’s current ratio ~3.3 is healthy and the company carries more cash than debt, giving it flexibility to invest in tech and withstand housing cycles ^[23].
Strategic Initiatives (Tech & Rentals Focus): Having exited the risky home-flipping Zillow Offers in 2021, Zillow has pivoted to a “housing super-app” strategy integrating listings, financing, and agent services. The company is heavily investing in AI and data: it launched a ChatGPT plugin for Zillow search (enabling users to query listings via AI assistant) and in Sept 2025 debuted AI-powered “Virtual Staging” in its Zillow Showcase listings ^[24] ^[25]. These tools use generative AI and computer vision to enhance listings (e.g. digitally furnishing empty rooms) and improve customer engagement. Zillow’s rentals business is another pillar – rentals now comprise roughly 25% of total revenue and are “accelerating each quarter” ^[26]. The company’s February partnership with Redfin to syndicate rental listings (now under FTC scrutiny) boosted Zillow’s multifamily inventory significantly. Zillow is also expanding services for landlords and property managers, aiming to capture the booming rental market as high interest rates push more Americans to rent.
Competitive Landscape: Zillow dominates U.S. real estate web traffic, with over 50% of all portal visits – more than double its next closest competitor ^[27]. On average in 2024, Zillow’s 366M monthly visits dwarfed Realtor.com’s ~142M and Redfin’s ~108M ^[28] (see table below). Redfin, a discount brokerage, remains a distant #2 and has faced headwinds (even agreeing in 2025 to be acquired by Rocket Companies to integrate mortgage offerings ^[29]). Opendoor, the leading iBuyer, saw its stock skyrocket ~1600% in 2025’s housing rebound, but Zillow – with tens of billions in market cap – has shifted away from direct iBuying and now coexists as a “powerful incumbent in real estate tech” rather than a house-flipper ^[30] ^[31]. Additionally, upstart Homes.com (backed by CoStar) has been rapidly growing traffic (46+M visits, ~13% of Zillow’s) by offering free listings ^[32]. Zillow’s vast audience and agent network give it a moat, but competitors are innovating: Redfin’s low-commission model, Opendoor’s instant offers, and CoStar’s aggressive push in online listings all underscore that Zillow must continue evolving to maintain its lead.
Outlook – Forecasts & Risks: Zillow provided bullish Q4 2025 guidance, forecasting $645–$655M revenue and Adjusted EBITDA of $145–$155M ^[33]. It expects “high single-digit” growth in its core for-sale business and >45% YoY growth in Rentals next quarter ^[34], as multifamily advertising accelerates. For full-year 2025, management projected mid-teens revenue growth and expanding margins, with positive net income ^[35]. Analysts generally concur on mid-term momentum: Benchmark sees EBITDA margins rising to ~27% by 2026 in a recovery scenario ^[36], and Zillow’s EPS for 2025 is expected around $1.69 ^[37]. Short-term, the stock may be range-bound by interest rate and housing market headlines – it remains ~20% below its 2025 highs. Long-term, Zillow’s fundamentals and tech leadership position it well if it can execute on rentals and AI initiatives. Key risks include the unpredictable housing cycle (a sharp market downturn could crimp Premier Agent and mortgage revenues), regulatory actions (the FTC case could force changes to the Zillow-Redfin rental partnership ^[38]), and competition from well-funded rivals. Investors should also watch Zillow’s spending: the company is ramping marketing and R&D (e.g. AI acquisitions) which must translate into user growth and higher monetization. Overall, Zillow enters 2026 with a solid financial foundation and multiple growth engines, but with the caution that real estate is a cyclical industry – making balanced, “actionable” optimism prudent for stakeholders.

Stock Performance: Post-Earnings Pop but Volatile Month

Zillow’s stock (ticker Z) saw a relief rally at the end of October 2025, thanks to strong earnings. Shares closed at $74.98 on Oct 31 – up +3.26 points or +4.55% for the day ^[39] ^[40]. This one-day spike recouped some losses from earlier in the month. However, over the five trading sessions spanning Oct 27 to Oct 31, the stock was down roughly 2%, as it began the week around the mid-$76 range and dipped before rebounding on earnings news. On a 1-month basis, Z stock is off about 2.17% ^[41].

This recent dip-and-rip reflects the broader market volatility affecting housing-related stocks. In mid-October, Zillow traded as low as ~$69 (a short-term trough) amid rising Treasury yields and weak home sales data. Even after the Q3 bump, Zillow remains well below its 52-week high of $93.88 and about 30% under 2021’s peak when low rates fueled a real estate frenzy. At the same time, shares are comfortably above the year’s low of $57.51 ^[42] reached during the spring when recession fears peaked. Over the past 12 months, Zillow’s stock is essentially flat (up a mere +0.36%) ^[43], lagging the S&P 500 as the housing sector grappled with 7%+ mortgage rates and softening sales.

From a valuation angle, Zillow’s market capitalization stands near $18 billion ^[44]. The stock currently trades at a forward P/E in the mid-40s (based on ~$1.70 EPS for 2025), which, while not cheap, reflects investors’ expectation of renewed growth. Technical trends have been choppy: Zillow spent much of Q3 trading in the $70s, with a brief rally above $80 in late summer followed by an early autumn pullback. The 20-day moving average flattened out by end of October, and trading volume spiked on the earnings release (Oct 31 volume ~6.3M shares, vs ~3M average) ^[45] – a sign of momentum traders jumping in. If positive catalysts continue (e.g. strong guidance, easing interest rates), Zillow could make another run toward the $80+ zone where it faced resistance earlier. Conversely, any disappointment or macro shock could see a retest of support around the mid-$60s. In short, Zillow’s stock is showing resilience after earnings but still needs a sustained catalyst (or a friendlier rate environment) to break out of its 2025 trading range.

Q3 2025 Earnings: Revenue Beats and Rental Strength

Zillow’s third-quarter 2025 earnings report, released October 30, demonstrated better-than-expected growth despite a tough housing market. Total revenue for Q3 was $676 million, up 16.4% year-over-year, beating consensus estimates (approximately $669M) ^[46]. This marks Zillow’s fastest growth in several years and exceeded the high end of management’s own outlook ^[47]. The company noted this performance outpaced the broader real estate industry’s ~5% YoY growth in transaction volume during Q3 ^[48] – indicating market share gains.

On the bottom line, Zillow reported adjusted earnings per share (EPS) of $0.44, up from $0.35 a year ago. This was essentially in line with expectations (Street consensus was around $0.43–$0.45) ^[49]. While a 1¢ EPS miss by Zacks’ measure (due to rounding) was noted ^[50], analysts generally viewed the result as flat to a slight beat, given differing estimates. Net income (GAAP) was $10 million (about $0.04 per share) ^[51] – a small profit, but a notable improvement from the $53 million net loss in Q3 2024, as Zillow swung back into the black. This was achieved through both higher revenues and disciplined cost management.

A key highlight was Zillow’s Adjusted EBITDA of $165 million, representing a 24% EBITDA margin, which expanded ~2 percentage points year-on-year ^[52]. The margin improvement suggests Zillow is benefiting from operating leverage as revenue grows. In fact, Q3 Adjusted EBITDA beat internal forecasts and Wall Street estimates (~$158M) by roughly 4% ^[53]. Zillow attributed the upside to “better-than-expected revenue growth and effective cost management” ^[54]. Notably, cost of revenue did rise 32% YoY to $185M ^[55], driven by higher lead acquisition costs and ad-serving expenses – mainly investments to spur its Rentals marketplace and partnerships. Even so, Zillow managed to hold operating expenses in check elsewhere, enabling profit margins to widen.

Breaking down revenue streams:

“Homes”/For Sale (Premier Agent + new construction): $488 million in Q3 revenue, up ~10% YoY ^[56] ^[57]. This segment – which includes Zillow’s core agent advertising business – benefited from slightly higher real estate transaction volumes in certain markets and Zillow’s improved monetization (Premier Agent revenue per transaction dollar rose to 10.1 bps from 9.8 bps a year ago ^[58]). Residential revenue (agents + new construction) grew 7% YoY to $435M ^[59], as builder advertising and Zillow’s ShowTime+ software sales offset softness in existing home sales. Mortgages revenue was a bright spot at $53 million, up +36% YoY ^[60], thanks to Zillow Home Loans scaling purchase originations – loan volume surged 57% to $1.3B amid Zillow’s partnerships with homebuilders and increased attach rates ^[61].
Rentals: The star of the quarter. Rentals revenue jumped 41% YoY to $174 million ^[62] ^[63], now making up roughly one-quarter of Zillow’s total revenue. Growth was “primarily driven by multifamily (apartment) revenue increasing 62% YoY” ^[64] ^[65]. This reflects Zillow’s successful push into large apartment building advertising – an area where CoStar and RentPath historically led. Zillow noted it had 2.5 million average monthly rental listings in Q3 (including both single-family homes and big complexes) ^[66], attracting a record number of renters to its platform. This multifamily momentum is expected to continue, as discussed in guidance.
Other: Zillow’s smaller segments (e.g. display ads and other revenues) were not broken out in detail, but likely contributed the remainder. “Other” has been relatively flat; Zillow sold its Zillow Offers homes segment in 2021, so the business is now streamlined into the categories above.

On the earnings call, management emphasized that Zillow beat its own outlook on both revenue and EBITDA ^[67], even in what Benchmark’s analysts called “the worst housing market in 30 years” for transaction volumes ^[68]. CEO Jeremy Wacksman struck an upbeat tone: “What drives our success is that we deliver exceptional consumer and partner experiences, relentlessly innovate with our products, and consistently execute well on our integrated-transaction strategy” ^[69]. In other words, Zillow credits its results to staying focused on its mission of making real estate moves easier for users.

Wall Street generally viewed the Q3 report as positive. The combination of solid growth in high-margin areas (Premier Agent, rentals) and improving profitability reassured investors that Zillow can navigate a difficult market. The slight EPS miss was mostly shrugged off, as revenue and EBITDA beat, and forward guidance was strong (discussed below). Zillow’s share price jumped in after-hours trading on Oct 30 and rallied further on Oct 31, reflecting the Street’s approval. As one headline put it: “Zillow’s Q3 revenues jump 16% on surging rentals and mortgage growth, even as higher costs weigh on earnings” ^[70]. That encapsulates the quarter – top-line growth was the defining positive, outpacing the drag of cost inflation.

Recent News & Developments (Late October 2025)

Aside from earnings, Zillow’s recent news cycle has featured a mix of analyst actions, product launches, and legal headlines:

Analyst Upgrades/Downgrades: In the wake of Q3 results (Oct 30–31), several analysts updated their views on Zillow. Notably, Benchmark reaffirmed its “Buy” rating and $95 price target on Oct 31 ^[71]. Benchmark’s bullish stance is rooted in Zillow’s progress despite housing headwinds. The firm highlighted Zillow’s EBITDA margin climbing from ~2.5% in 2021 to ~20% now – achieved even in a slow market – as a sign of strong execution ^[72]. Benchmark expects margins to keep expanding (to ~27% by 2026) and sees Zillow’s traffic and data advantages as key in an AI-driven real estate future ^[73] ^[74]. By contrast, Goldman Sachs maintained a more cautious Neutral rating, but did raise its price target from $70 to $78 after earnings, acknowledging Zillow’s outperformance of estimates ^[75]. Cantor Fitzgerald also stayed Neutral with a $74 PT ^[76]. UBS, while remaining bullish, trimmed its target to $92 (from $95) and slightly lowered its 2026 margin forecasts ^[77], citing a more conservative view on how quickly the real estate market can rebound. These mixed-but-positive analyst reactions indicate a consensus that Zillow is executing well, though opinions differ on how much upside is left in the stock at current levels (~$75). Overall, the sentiment tilts optimistic, especially on Zillow’s long-term tech and market position, with at least half a dozen Buy ratings reiterating post-earnings (Benchmark, UBS, Bank of America, etc.).
Product and Strategy Updates: Zillow continues to roll out new features as part of its strategy to be a one-stop real estate platform. In late October, Zillow was gearing up for its first “Zillow Unlock” conference for agents (held Nov 3–5, 2025 in Las Vegas) ^[78], an event to showcase Zillow’s technology and partner programs. This underscores Zillow’s outreach to its Premier Agent community with new tools. A major product launch earlier in the fall was “Zillow Showcase” with AI Virtual Staging (announced Sept 2025) – allowing buyers on Zillow to toggle listing photos to see rooms furnished in various styles digitally ^[79] ^[80]. This feature leverages Zillow’s October 2024 acquisition of a virtual staging AI startup ^[81] and is now live on select listings, making Zillow’s user experience more engaging and interactive. Zillow reported strong early adoption of these AI-driven features; for example, SkyTour (an interactive 3D aerial viewing tool launched in summer 2025) combined with Virtual Staging has given agents a fresh selling point to win listings ^[82] ^[83]. In the mortgage arena, Zillow Home Loans in October began offering a 1% down payment program for qualified first-time buyers in certain markets (an initiative to spur purchases despite high rates). Zillow is also expanding its “Housing Super App” concept – integrating ShowingTime (scheduling), Dotloop (transaction management), and its mortgage pre-approval into one seamless flow. These product developments weren’t all in late October specifically, but they form the backdrop of Zillow’s news: an image of a company pushing tech innovation (AI, 3D, chatbots) and vertical integration (one-click home buying and renting).
FTC Antitrust Lawsuit (Rental Listings): On October 6–7, the U.S. Federal Trade Commission (FTC) filed suit against Zillow and Redfin in a high-profile case that made national news ^[84] ^[85]. The FTC alleges that a February 2025 “partnership” agreement between Zillow and Redfin to share rental listings was effectively an illegal non-compete that would “eliminate competition” in the rental advertising market ^[86]. According to the complaint, Zillow paid Redfin to stop accepting multifamily rental ads (large apartment complexes) and instead funnel those clients to Zillow, making Redfin’s rentals section essentially a syndicated copy of Zillow’s listings ^[87] ^[88]. In exchange, Redfin purportedly agreed to exit the rental ads business for 9 years and refer all those advertisers to Zillow ^[89]. The FTC contends this arrangement is an antitrust violation (breaching the Sherman Act and Clayton Act) that could lead to higher prices for rental property owners (and eventually renters) by reducing competition ^[90] ^[91]. Both companies strongly deny wrongdoing. Zillow asserts that the Zillow-Redfin syndication deal “benefits both renters and property managers… by connecting property managers to more high-intent renters”, calling it “pro-competitive and pro-consumer” ^[92]. Redfin similarly said it “strongly disagrees” with the FTC and is confident the partnership will be upheld, noting that by late 2024 Redfin’s own rental advertising business was not economically viable and the Zillow deal allowed it to cut costs while giving Redfin users more listings ^[93]. This case is significant – it’s the first major antitrust action in online real estate listings in years. A federal court in Virginia will decide whether to unwind the partnership or impose penalties ^[94]. For Zillow, the implications are material: rentals have been a growth engine (41% YoY in Q3), and multifamily ads are a big component. If the FTC succeeds, Zillow could lose a stream of paid listings or face more competition from a re-energized Redfin in rentals. The lawsuit is in early stages, so no immediate changes, but it adds regulatory risk to Zillow’s outlook. Investors took note – Zillow’s stock dipped slightly when the suit was announced (though broader market factors were also at play). Zillow insists the partnership will “continue to deliver value” and is mounting a defense. This will be a story to watch into 2026.
Housing Market Context (Late Oct): The broader real estate market in late 2025 remained challenging, and this was part of Zillow’s narrative. Mortgage rates hit 20-year highs (~7.5% for 30-year fixed) in October, chilling home sales to the lowest pace since 2010. Zillow’s own research pointed to a slight uptick in inventory and longer time on market for listings. However, home prices nationally were proving resilient (Zillow’s Home Value Index still up ~3-4% YoY). In earnings calls and media, Zillow’s management acknowledged these headwinds but noted pockets of strength: new construction homes (where builders offer rate buydowns) and rentals (demand robust as many would-be buyers rent). They also commented on seasonal trends, expecting some winter slowdown but a potential rebound in spring 2026 if rates stabilize. Additionally, October saw some policy news (e.g. hints at future Fed rate cuts in 2026) which, if realized, could boost housing. Zillow, in late Oct, also published insights from its economists at Zillow Research, including 2025-2026 home price forecasts (modest growth) and rental market trends (cooling rent inflation). These didn’t directly move the stock, but help frame Zillow as a thought leader in real estate data.

In summary, the end of October 2025 for Zillow was dominated by its strong quarterly results and the ensuing analyst commentary, contrasted against the backdrop of a sluggish housing market and an unexpected FTC challenge. The company’s news suggests a focus on growth opportunities (rentals, tech upgrades) while managing external challenges. This sets the stage for how Zillow will navigate the coming quarters.

Expert Commentary and Analyst Views

Market experts and analysts have been actively weighing in on Zillow’s performance and prospects:

Benchmark’s Bullish Stance: Perhaps the most notable commentary came from Benchmark’s research note on Oct 31, which was highly optimistic ^[95]. Benchmark analysts argued that Zillow is proving its mettle even in a tough environment. They pointed out that Zillow’s adjusted EBITDA margin is now ~20% – a dramatic improvement from just 2.5% in 2021 ^[96]. This margin expansion, in their view, underscores management’s effective cost control and the scalability of Zillow’s platform (especially after exiting the cash-burning iBuyer business). “Zillow’s impressive margin expansion [from 2.5% to ~20%] has occurred in what the firm called ‘the worst housing market in 30 years’,” Benchmark noted ^[97], highlighting that few companies in real estate are achieving such profitability at the moment. Looking ahead, Benchmark sees margins reaching 27% next year (2026) and revenue growing at least 15% annually through 2026 ^[98]. They were also encouraged by Zillow’s EPS turning positive; based on InvestingPro data cited, analysts collectively expect $1.69 EPS in 2025 ^[99], versus losses over the last 12 months.

Crucially, Benchmark emphasized Zillow’s competitive advantages: “Zillow’s competitive advantages in consumer traffic and agent products [are] particularly valuable in an increasingly AI-driven marketplace where data is crucial” ^[100]. In other words, Zillow’s massive user base and troves of home data give it an edge that should not only preserve its dominance but also allow it to monetize emerging tech like AI better than peers. Benchmark concluded that Zillow’s stock is “particularly attractive at current levels”, implying the recent $70-ish price was a buying opportunity ^[101]. They set a Street-high $95 price target, which suggests strong upside.

Goldman Sachs and Cantor: Neutral but Positive on Execution: Goldman Sachs, while keeping a Neutral rating, acknowledged the company’s solid execution. Post-earnings, Goldman analysts said Zillow delivered “solid quarterly results that demonstrated progress despite recent negative headlines and challenging housing market conditions” ^[102]. They were impressed that revenue growth of +16% far outpaced the flat-to-down industry volumes. Goldman slightly boosted their target to $78 (from ~$70 prior), essentially saying the stock’s fair value is in the high-$70s absent a bigger housing recovery ^[103]. They noted that much of the near-term upside is already reflected after the earnings pop, hence the Neutral stance. Cantor Fitzgerald echoed similar reasoning, keeping their target at $74 (around the then-current price) ^[104]. Cantor’s analysts commended Zillow for beating their revenue and EBITDA estimates by ~1% and ~4% respectively ^[105], but they want to see improvement in macro trends before turning more bullish. Essentially, these neutral commentators are saying: “Great job, Zillow – but show us a housing market rebound or sustained outperformance, and then the stock can break out further.”

UBS: Long-Term Bull with Minor Tweaks: UBS remains Buy-rated on Zillow, but in late October they adjusted their model slightly. They lowered their price target to $92 (down from $95) ^[106], mainly because they trimmed EBITDA margin expectations for 2026 (from 28.5% to ~26.6%). UBS still believes Zillow will post ~15% revenue CAGR over the next couple of years ^[107] – effectively aligning with Zillow’s own guidance of “mid-teens” growth. However, UBS cited the potential for higher marketing spend or integration costs (e.g. incorporating new products like Zillow One app or more acquisitions) that could temper margin expansion. They also likely factored in a bit of caution around the FTC rental listing case (legal uncertainties can justify a small valuation haircut). Despite these tweaks, UBS’s tone was positive: Zillow’s leadership in audience size, its refocused business model, and tailwinds from rentals and AI keep them bullish long-term.

Zacks and Yahoo Finance (News Bureau): A Yahoo Finance summary by Zacks Equity Research headlined “Zillow Misses Q3 Earnings Estimates Despite Higher Revenues”. It noted the slight EPS miss but emphasized that “results reflected higher for-sale and rental revenues year over year” and that cash flow from operations remained healthy ^[108]. Zacks currently has Zillow at a Rank #3 (Hold), which is a neutral stance ^[109]. They are waiting to see how the next quarter plays out, given that Q4 guidance, while strong in rentals, still assumes only high-single-digit growth in the core agents segment (implying the broader market is not booming yet). The Zacks piece also flagged the rise in cost of revenue (+32%) as a note of caution, though it acknowledged Zillow’s overall margins improved ^[110].

Industry Experts / Other Commentary: Real estate tech commentators have pointed out that Zillow’s move to prioritize rentals is paying off. As one Seeking Alpha contributor put it, “Zillow’s rentals platform is driving rapid revenue growth, now accounting for a quarter of revenue and accelerating each quarter” ^[111]. This shows up in the numbers, and experts view it as a smart hedge against a weak sales market – rental income is less correlated to home purchase cycles. Some experts also mention that Zillow’s pivot away from iBuying was wise; by cutting that loss-making division in 2021, Zillow avoided the fate of peers that struggled (Opendoor had massive losses in 2022). “Zillow… no longer threatens Opendoor in iBuying – it’s a powerful incumbent in real estate tech that Opendoor must coexist with,” observed TS2 Technology Media ^[112], contrasting Zillow’s stable, diversified model with Opendoor’s narrower focus.

On the legal front, industry legal analysts note that the FTC’s case against Zillow/Redfin is “aggressive”. Antitrust lawyer observers on some blogs and Twitter have said the FTC under Lina Khan is pushing novel arguments – pursuing relatively small market agreements like this rental ad pact might be a stretch. If Zillow prevails, it could actually strengthen its hand in rentals (vindicating the partnership strategy). If the FTC forces changes, Zillow might need to open up its platform more or compete harder for rentals eyeballs, which could slow rental revenue growth. Analysts haven’t materially factored in a negative outcome yet, as it’s early.

Finally, CEO Jeremy Wacksman’s commentary on CNBC and other outlets post-earnings is worth noting. He acknowledged that “the housing environment is noisy and challenging,” but emphasized Zillow’s focus on controlling what it can: “We can’t set interest rates, but we can make the process of finding and getting a home smoother”, he said, reinforcing the company’s tech-and-partnership strategy. Wacksman also pointed out that Zillow has been through cycles before and that “when the market inevitably improves, we’ll be coming from a much stronger position than a few years ago”. This aligns with many analysts’ view – Zillow is positioning itself to thrive when real estate rebounds.

In summary, expert sentiment on Zillow is cautiously optimistic. The company is getting credit for executing well and innovating, even as macro conditions remain tough. Bulls highlight Zillow’s dominant platform and improved profitability, while moderates note that a lot hinges on a housing market recovery and continued management discipline. There is a sense that Zillow’s stock has more upside if it can hit its targets, but also that it’s not deeply undervalued anymore after the recent rally – it’s in a “show me” phase. Importantly, Zillow’s strategic moves (rental push, AI, partner integrations) are earning plaudits, suggesting the market sees Zillow as more than just a listings site – it’s a tech-driven real estate ecosystem in the making.

Company Fundamentals and Financial Health

Zillow Group’s fundamentals paint the picture of a company that has emerged leaner and more focused after the pandemic housing rollercoaster. Key aspects of Zillow’s financial health include:

Revenue and Growth: For the full year 2024, Zillow generated $2.2 billion in revenue, which was a 15% increase over 2023 ^[113] ^[114]. That growth has continued into 2025, with year-to-date revenues (through Q3) up around 14–16% YoY. Zillow now expects mid-teens percentage revenue growth for full-year 2025 ^[115], at the high end of its prior outlook. This is remarkable given that U.S. existing home sales volumes in 2025 are tracking down ~20% from 2021 peaks. Zillow’s ability to grow in a down market stems from increased market share and diversification. The heavy lifting is coming from Rentals and New Construction advertising, as well as improving yields (revenue per lead) in Premier Agent due to product improvements. The company’s user base is vast and still expanding modestly – Zillow’s sites and apps had 250 million average monthly unique users in Q3 2025 ^[116], up 7% YoY, and total visits of 2.5 billion (+4% YoY). This large audience provides a foundation for revenue: Zillow monetizes a fraction of these eyeballs through ads and agent referrals, so as usage grows or monetization per user grows, revenue follows.

Profitability: Zillow’s profitability metrics have improved after the exit from iBuying. Gross profit margins are high (in the ~90% range on core marketplace revenues, since Zillow’s cost of revenue is mainly credit card fees and server costs). The main expenses are in sales & marketing and R&D. Zillow’s Adjusted EBITDA margin in Q3 was 24% ^[117]; for the full year 2025, it’s likely to land around ~23–25% given Q4 guidance and typical seasonality. The company aims to eventually reach 30–40% EBITDA margins in a more normalized environment (a target often cited by management, comparing to other online ad marketplaces). On a GAAP basis, Zillow is just around break-even net income year-to-date 2025. Importantly, Zillow said it expects to maintain positive GAAP net income for 2025 ^[118]. This would be the first full-year profit since 2019 (previous years were skewed by the iBuying losses). The improving profitability is reflected in operating cash flow as well – Zillow generated $296M in operating cash in the first 9 months of 2025 ^[119], roughly flat vs last year’s $306M, despite all the growth investments, indicating solid cash earnings quality.

Balance Sheet and Liquidity: Zillow’s balance sheet is robust. As of September 30, 2025, Zillow held $1.4 billion in cash, cash equivalents, and investments ^[120]. Debt is minimal: Zillow has no significant long-term debt besides ordinary course financing for its mortgage loans (which are offset by held-for-sale loan assets). It has a small amount of convertible notes that were issued in 2019, but those are often counted as equity-like since they can convert (and much was repurchased in 2021). The current ratio (current assets divided by current liabilities) is about 3.3, reflecting ample short-term liquidity ^[121]. Zillow’s working capital is strongly positive, and it has no liquidity concerns. In fact, Zillow is in a net cash position – more cash than debt – which is a strategic advantage if opportunities or downturns arise.

Share Structure: Zillow has two classes of common stock: Class C (ticker Z) with no voting rights, and Class A (ticker ZG) with 1 vote/share. Insiders also hold Class B super-voting shares (mostly the founders and early investors). The presence of super-voting shares means Zillow’s founders maintain significant control, though co-founder Rich Barton stepped down as CEO in 2023 and was succeeded by Jeremy Wacksman in 2025. There’s no dividend (Zillow has never paid dividends ^[122]), as the company reinvests cash into growth. Zillow did have a share buyback program authorized in 2022 (mostly to offset dilution from stock-based comp), but no large repurchases recently.

Cash Flow and Investments: Zillow is funneling cash into product development and strategic acquisitions. In 2023–2024 it acquired a few small tech companies (e.g., in AI, 3D tours, and showing management). These have been easily funded out of cash on hand. Capital expenditures remain light – Zillow’s business doesn’t require heavy capex beyond servers and office equipment. One note: Zillow still holds some legacy mortgage loans (originated when it had iBuying and provided seller financing). But those are being wound down or sold; it’s not a big part of the balance sheet now.

Fundamental Ratios: Zillow’s trailing twelve-month (TTM) P/E is not meaningful due to near-zero net income. Forward P/E ~45x as noted. Price-to-sales is around 7.5x (with ~$2.4B est. 2025 revenue and ~$18B market cap), which is higher than most real estate peers, reflecting its tech-like margins and growth. Price/Book is high because Zillow’s book equity is only ~$4B (intangible asset write-downs from prior acquisitions have kept book low). Investors seem to value Zillow on a EV/EBITDA basis (~30x forward EBITDA) or a DCF of future cash flows expecting growth and margin expansion.

Earnings Quality: Zillow’s earnings quality is relatively high now – meaning earnings are backed by cash. Stock-based compensation (SBC) is a notable expense (~$150M per year) which, if added back, boosts cash flow above GAAP profit. However, dilution from SBC has been modest (share count up only slightly YoY). Zillow’s adjusted EPS tends to add back SBC and some acquisition-related costs; by that measure, adjusted EPS is higher than GAAP. Still, Zillow’s move to positive GAAP earnings is a milestone showing the core business can sustain profitability without adjustments.

Overall, Zillow’s fundamentals reflect a healthy, asset-light company with strong cash generation and no debt – a far cry from the Zillow of 2020–2021 that was leveraged to housing inventory. The transformation after exiting Zillow Offers has left Zillow financially sound. It has the capacity to weather downturns and invest in growth (like AI initiatives) simultaneously. One could say Zillow’s finances are “built for the long haul” now, which is exactly what management intended when refocusing on its high-margin internet marketplace roots.

The main financial challenge for Zillow is to accelerate revenue growth back towards 20%+ in a normalized market, while maintaining cost discipline. If they can do that, the operating leverage could make Zillow a cash cow. If growth falters or costs creep up (e.g., heavy marketing spend to fight competitors), margins could stagnate. But as of late 2025, Zillow’s financial footing is strong, giving it flexibility to seize opportunities (or endure storms) as the real estate cycle turns.

Zillow’s Strategic Initiatives: Tech, AI, and Rentals

Zillow’s strategy in 2025 is centered on transforming its platform into a comprehensive real estate ecosystem – often dubbed a “Housing Super App” by management. Key strategic initiatives include:

1. Embracing AI and Next-Gen Technology: Zillow is investing heavily in artificial intelligence and machine learning to enhance user experience and operational efficiency. Notably, in early 2023 Zillow launched an integration with OpenAI’s ChatGPT, making Zillow one of the first real estate brands with an AI chatbot experience. Users can ask ChatGPT (with the Zillow plugin enabled) to find home listings that meet certain criteria, and ChatGPT will pull data from Zillow’s listings to answer naturally ^[123]. This was a novel way to search for homes conversationally, and it positions Zillow at the forefront of AI-driven search. By Oct 2025, Zillow reported that thousands of users had tried the ChatGPT-based home search, and it’s iterating on that feature.

Another futuristic feature is Zillow’s AI-powered Virtual Staging (launched September 2025). This technology, built from Zillow’s acquisition of Virtual Staging AI (VSAI), allows home shoppers to virtually furnish and decorate a listing’s photos on demand ^[124] ^[125]. For example, if you’re looking at an empty living room photo on a Zillow listing, you can click “Virtual Staging” and instantly see that room filled with furniture in various styles (modern, farmhouse, etc.) chosen by you ^[126] ^[127]. It essentially applies computer vision and generative image AI to create photorealistic staged homes. This helps buyers visualize potential and helps agents/sellers market homes without the cost of physical staging. Zillow has integrated this into its premium listings product “Zillow Showcase”, and early data shows it increases user engagement (more time spent on listings). It’s also a selling point to recruit agents to Zillow’s platform – Zillow cites that agents using rich media like 3D tours and AI staging “win 30% more listings” and their listings sell for ~$7k more on average ^[128], which is compelling.

Zillow’s Zestimate algorithm (the home valuation tool) also continues to be a core AI component. By 2025, the Zestimate’s median error rate for on-market homes is down to ~1.9% ^[129], which is extremely accurate by industry standards (off-market homes ~6% error). Zillow leverages machine learning on millions of data points (recent sales, home attributes, neighborhood trends) to keep improving these estimates – both to drive consumer engagement and to use internally (e.g., in screening mortgage applicants or identifying leads).

Beyond these, Zillow is exploring AI in customer service (automating Q&A for its Premier Agent support), recommendation engines (suggesting homes or neighborhoods a user might like based on their search behavior), and automating listings data (using AI to parse listings descriptions or even generate descriptions). The overarching goal is to make Zillow’s platform more personalized and “magical” – so users feel it understands their needs and can do more of the heavy lifting in home search. As Zillow’s SVP of AI, Josh Weisberg, put it: “AI has long been part of Zillow’s DNA… from the Zestimate to personalized search, and now to dynamic listing experiences” ^[130]. Zillow’s broader AI vision is to “fully integrate AI” to personalize the experience for buyers/sellers and make agents’ jobs easier through automation ^[131].

2. “Housing Super App” – Integrating Services: Zillow is working to tie all aspects of a real estate transaction into one cohesive digital flow on its platform. This strategy came after Zillow’s iBuying exit, when management said they want Zillow to be the starting point and facilitator for every part of moving. Concretely, this means linking home search, financing, agent engagement, touring, and transacting in one app.

For buyers, Zillow now offers the ability to get pre-qualified for a mortgage through Zillow Home Loans right on the listing page. Zillow’s app can show a buyer their estimated mortgage rate and monthly payment, and even a pre-approval letter, which is a big step toward making an offer. Zillow also integrated ShowingTime+, so users can directly request home tours or video walkthroughs from the listing page, which notifies the seller’s agent and schedules via ShowingTime. If a buyer is ready to make an offer, Zillow’s partnership with its Premier Agent network means it can quickly connect them with a local agent (or a Zillow employee in some cases) to draft the offer. Zillow also owns Dotloop, a transaction management software, to handle e-signatures and closing documents.

For sellers, Zillow’s aim is to provide a menu of options: traditional agent listing, an instant cash offer (through partners, since Zillow no longer buys homes itself, it connects to Opendoor in some markets for this), or a sale preparation service (via partners like renovators or stagers). Zillow’s October 2025 launch of the “Listing Showcase” product is part of attracting more for-sale business – it’s a premium listing ad that gives a home extra visibility and customization on Zillow’s site, which agents can purchase to make their client’s home stand out (and justify a higher commission to the agent perhaps). This is being marketed to top agents and creates a new revenue stream for Zillow.

On the rentals side, Zillow similarly wants to streamline the process: renters can now search, tour, apply, and even pay rent through Zillow’s platform in some cases. Zillow’s rental applications allow one application to be used for multiple properties (a big convenience for renters), and Zillow has been piloting a rent payments portal (though uptake is still early). The integration of Zillow’s rental tools with its listing search is aimed at capturing young users who start as renters and then convert to buyers down the line, keeping them in Zillow’s ecosystem.

3. Rentals Marketplace Expansion: We’ve touched on it throughout, but to underscore – Zillow is doubling down on rentals. The company recognized that in any given year, the number of renters moving is roughly triple the number of homebuyers ^[132]. In 2025, there are an estimated 46 million renter households in the U.S., and Zillow sees huge opportunity in serving that segment ^[133] ^[134]. By beefing up rental inventory (e.g., the Redfin syndication deal brought tens of thousands of new apartment listings to Zillow) and offering better tools for renters, Zillow grew its rentals revenue 41% YoY in Q3. Zillow is now often first to market with new rental tech: features like 3D tours for rentals, AI-generated floor plans, and building amenity data integrated into search filters. Renters can search for apartments that allow dogs, have air conditioning, co-working spaces, etc., with a level of detail that wasn’t common a few years back. Zillow also provides landlords/property managers with free listing tools and a suite of paid options (like promoting their property as a “Zillow Premium Listing”).

Strategically, rentals not only bring in advertising dollars, but they’re a way to engage consumers earlier in life. A 25-year-old using Zillow to find an apartment might later use Zillow to buy a house at 30. So Zillow wants to “own” that relationship from the first lease to the eventual purchase. The risk was that Zillow historically lagged specialized sites like Apartments.com in multifamily. But the partnership strategy (syndicating others’ listings) and a focus on user experience have boosted Zillow Rentals to arguably the largest rentals audience online. Zillow’s own data from late 2024 showed it had more traffic on rentals than any other platform. Multifamily revenue (from big landlords) was up 62% YoY in Q3 ^[135], which indicates those clients see value in Zillow’s reach.

4. Post-iBuyer Focus – Partner Network and Asset-Light Model: After the Zillow Offers shutdown, Zillow has portrayed itself as an asset-light marketplace that partners rather than competes. For instance, instead of directly buying homes, Zillow has a partnership with Opendoor (since 2022) where Zillow users in certain cities can request an Opendoor cash offer through Zillow’s site. Zillow then gets a referral fee if the sale happens. Similarly, Zillow has a partnership with Rocket Mortgage (separate from Rocket’s plan to acquire Redfin) to funnel some loan applicants where appropriate. The strategy is to partner for services that Zillow doesn’t want to do in-house, thus still capturing the consumer while avoiding heavy capital or regulatory burdens. This is a shift to a “platform” mentality akin to how Amazon Marketplace lets third parties sell – Zillow provides the audience and interface, partners provide the fulfillment. It’s a lower-revenue but higher-margin approach vs iBuying’s high-revenue, low-margin model.

5. Enhancing Agent Value Proposition: Zillow’s relationship with real estate agents has had tensions historically (some agents disliked Zillow’s listing dominance or its past flirtation with direct sales). In 2025, Zillow is actively mending and strengthening ties with agents. The Premier Agent program is being refined to deliver better leads and ROI for agents. Zillow reduced some geographic territories to ensure leads are high-quality and not oversold. It’s also rolling out a new CRM and dashboard for agents integrated with ShowingTime+, making it easier for agents to manage Zillow leads and track client progress. The Unlock 2025 conference (first of its kind by Zillow) is another way Zillow is trying to build a community with its top-producing agents and brokers, offering them training, networking, and previews of Zillow’s tech roadmap. The endgame is to keep agents spending their marketing dollars on Zillow (rather than rivals or Facebook ads) because they see Zillow as an indispensable partner. With competitors like Realtor.com and Redfin (via Redfin Partner Program) also vying for agent advertising, Zillow wants to clearly be the #1 choice for agent marketing spend. Agents contribute the bulk of Zillow’s revenue (Premier Agent), so maintaining loyalty and demonstrating value (especially when market transactions are down) is strategically vital.

In summary, Zillow’s strategic initiatives in 2025 revolve around leveraging technology (especially AI) to enrich its platform, expanding into rentals and other transaction adjacencies, and fostering an ecosystem that connects all players (consumers, agents, landlords, lenders). By doing so, Zillow aims to drive growth without returning to the balance-sheet-heavy experiments of the past. It’s about being the tech platform at the center of real estate transactions, rather than a participant in each transaction. So far, this strategy appears to be yielding results – Zillow’s user base is at record levels, revenue per user is rising, and new revenue streams (like rentals, new construction, Listing Showcase) are ramping up. The challenges will be execution and competition: Zillow must continually innovate (lest its app become stale) and keep partners happy, all while defending its turf from hungry rivals.

Competitive Landscape: Zillow vs. Peers (Redfin, Opendoor, Realtor.com & More)

Zillow operates in a competitive arena that spans traditional real estate brokerages, newer proptech players, and other online portals. Here’s how Zillow stacks up against key peers:

Online Real Estate Portals (Traffic and Audience): Zillow is the undisputed leader in online real estate traffic in the U.S. It attracts more visitors than its next three competitors combined. The table below illustrates the average monthly visits for top real estate sites:

Platform	Avg. Monthly Visits (2024)	Share vs. Zillow
Zillow.com	366 million ^[136]	100% (baseline)
Realtor.com	142 million ^[137]	~39% of Zillow
Redfin.com	108 million ^[138]	~30% of Zillow
Homes.com	46.8 million ^[139]	~13% of Zillow

As shown, Zillow commands around 50%+ of all U.S. real estate portal traffic ^[140]. Realtor.com (owned by Move Inc., a News Corp subsidiary) is the second-largest portal by traffic, focusing on MLS-listed homes and new construction. Redfin – which is both a portal and a brokerage – comes in third for traffic. Homes.com (owned by CoStar Group) is a rising “upstart” that has rapidly grown to ~13% of Zillow’s scale by offering free listings to agents and leveraging CoStar’s resources.

Zillow’s massive audience is a huge competitive advantage. More traffic means more leads for agents and more ad impressions, fueling a virtuous cycle. Realtor.com and Redfin both often advertise their accuracy or service differences but have not closed the gap in consumer mindshare. In fact, Zillow’s brand has become almost synonymous with online home search (to “Zillow” a house is now a verb for many). Zillow’s mobile apps are also top-rated and heavily used, whereas some competitors have struggled to achieve the same engagement on mobile.

Redfin: Redfin is both a competitor and, to an extent, a partner. Redfin runs a unique hybrid model: it’s a brokerage with salaried agents and it also operates a popular search website. Redfin’s key differentiator is offering lower commission fees to sellers (often 1%–1.5% listing fee vs ~2.5–3% traditional) and refunding part of the commission to buyers in some cases. This consumer-friendly pricing attracted a lot of attention, but Redfin’s market share remains small – it has about 1–2% of U.S. existing home sale volume. Financially, Redfin has struggled with profitability; it often posted losses and had to cut costs (it shut down its own iBuying arm “RedfinNow” in 2022, similar to Zillow’s exit from Offers) ^[141]. As of March 2025, Redfin’s market cap was around $1.4 billion – a fraction of Zillow’s ~$17–18B ^[142] – reflecting its smaller scale and slimmer margins.

A huge recent development: In March 2025, Rocket Companies (the parent of Rocket Mortgage) announced plans to acquire Redfin ^[143]. This proposed deal (expected to close by late 2025 or early 2026, pending approvals) would combine Redfin’s website and agent network with Rocket’s mortgage powerhouse. The strategic intent is to create a more seamless “search to close” experience – essentially what Zillow is also trying to do. If this merger proceeds, Zillow could face a newly fortified competitor that pairs the #2 real estate portal with the #1 mortgage lender. Rocket’s resources could help Redfin expand marketing or subsidize those low commissions longer. On the other hand, integration risks and culture clash (fintech vs. brokerage) might limit its impact initially.

For now, Zillow’s relationship with Redfin is complex: competitive in attracting home shoppers and agent listings, but collaborative in rentals (with the listing syndication deal). The FTC lawsuit indicates regulators see Zillow and Redfin as capable of colluding, implying they are the top two in rentals online. Redfin’s CEO has often said Redfin’s website is great at search, but Zillow has a far larger audience – a gap that’s been hard to close without spending heavily on ads or partnerships (hence Redfin’s pragmatic decision to partner on rentals and possibly sell to Rocket).

Opendoor: Opendoor Technologies (NASDAQ: OPEN) is the leading iBuyer, a company that uses technology to buy homes directly from sellers, then resell them. Opendoor competes with Zillow in the sense that both target home sellers – but via very different approaches. Zillow tried iBuying with Zillow Offers from 2018 to 2021 but exited after significant losses (nearly $900M lost in 2021) ^[144]. Opendoor persisted, and by 2025 it remains essentially the “last man standing” in iBuying (Offerpad is smaller; Redfin and Zillow quit; Orchard and others pivoted).

2025 has been a wild ride for Opendoor’s stock: from under $1 in June 2025 to over $10 by October – a 1600% rally at one point ^[145]. This was fueled by signs that Opendoor was approaching profitability on an adjusted basis as housing stabilized and by a meme-stock-like speculative frenzy. (Opendoor reported a surprise adjusted EBITDA profit in Q2 2025 ^[146], boosting investor hopes it can make the model work). For Zillow, Opendoor is more partner than foe now. Zillow has a referral deal: Zillow offers homeowners a “cash offer” option powered by Opendoor in certain cities, earning a fee when sellers take it. This means Zillow can serve those who want an instant sale, without Zillow taking on the risk of home flipping ^[147]. Opendoor benefits by getting seller leads from Zillow’s huge audience, which it otherwise would spend marketing dollars to acquire.

In terms of influence, Zillow is far larger by revenue (~$2.2B vs Opendoor’s $4.5B in 2024, but Zillow’s revenue is high-margin ads whereas Opendoor’s is low-margin home sales). Market cap wise, Zillow ~$18B vs Opendoor ~$6B after its rally. One could say Zillow “co-opted” Opendoor – by partnering, Zillow can offer that service and keep users in its ecosystem, while letting Opendoor handle the capital-intensive part. If Opendoor thrives, Zillow can send more business its way and collect referral fees. If Opendoor struggles, Zillow is insulated. Thus, Zillow cleverly turned a competitor into an adjunct service.

However, Zillow still competes indirectly with Opendoor for home sellers’ attention. A seller might weigh: do I list on Zillow through an agent (Premier Agent network) or do I take Opendoor’s cash offer? Zillow likely wins either way now due to the partnership, but if Opendoor were to cut Zillow out or if another entrant came, Zillow might need to adjust. There is also competition in the sense of mindshare: Opendoor promotes the idea of “skip the hassle, sell to us,” whereas Zillow (post-iBuyer) promotes “use our tools to get the best sale (often with an agent).” So far, traditional listings dominate; iBuyers at peak were only ~1% of U.S. home sales. It remains to be seen if Opendoor’s resurgence will meaningfully challenge the traditional process. If it does, Zillow might re-evaluate getting more directly involved (or even acquiring Opendoor, as some have speculated in the past). But given Zillow’s current path, it seems content letting Opendoor handle that niche while Zillow focuses on media and software.

Traditional Brokerages and Franchises: Companies like Realtor.com (Move), Keller Williams, RE/MAX, Anywhere (formerly Realogy), etc., are in the mix but mostly as partners or upstream data sources rather than direct threats to Zillow’s online dominance. Realtor.com, as noted, competes for portal traffic but doesn’t have Zillow’s scale or brand strength with consumers. It does have official ties to the National Association of Realtors (NAR) which give it credibility, and it monetizes by selling leads like Zillow does. Realtor.com’s owner News Corp was reportedly exploring a sale of Move/Realtor.com in 2023, but nothing materialized – possibly due to a valuation gap. That left Realtor.com a bit resource-constrained compared to Zillow (and now CoStar’s big investment in Homes.com).

Traditional brokerages (RE/MAX, Coldwell Banker, Compass, etc.) rely on Zillow for advertising and leads more than they compete with it. Many agents from those firms buy leads or advertise on Zillow. Some big brokerages have tried to boycott Zillow or promote their own apps, but consumers still flock to Zillow. That said, if big broker networks ever fully pulled listings from Zillow (through MLS control), that could hurt, but it’s unlikely given seller clients want exposure and Zillow often has agreements to access MLS feeds.

CoStar and Homes.com: A new formidable player is CoStar Group, a commercial real estate data giant that entered residential by acquiring Homes.com in 2021. CoStar has stated it aims to build Homes.com into a top portal to rival Zillow. They’ve invested heavily, making listings free for agents (no charge to list on Homes.com, contrasting with Zillow’s model of charging for prominence or leads). By October 2025, Homes.com had grown traffic significantly (doubling over the year to ~47M visits/month, as shown above) ^[148]. CoStar’s strategy is to lure agents and brokers by not monetizing via lead sales (some agents dislike Zillow for “selling back our own leads”). Instead, CoStar plans to monetize via selling marketing solutions and perhaps premium memberships, but not simple lead fees. It’s too early to tell if Homes.com can truly challenge Zillow’s consumer mindshare, but CoStar’s deep pockets (market cap ~$30B) and track record in dominating commercial listings (LoopNet, etc.) mean Zillow cannot ignore them. Zillow’s counter is to keep innovating on user experience and maintain that network effect of consumers and agents.

Meta, Google, Others: Indirectly, Zillow also competes with general digital advertising channels for agent marketing budgets. An agent could spend money on Zillow Premier Agent, or on Facebook ads, Google search ads, etc. If Zillow’s lead quality is superior, agents spend there. So Zillow competes on ROI delivered. Tech giants dabble in real estate – Google searches funnel a lot of traffic to Zillow and competitors, and Google has its own local business listings for agents (but not comprehensive home listings). Facebook (Meta) has Marketplace where rentals are listed by individuals, but it’s not a serious competitor in structured listings. In 2025, no FAANG company has made a serious direct play to dethrone Zillow (though one can never rule out future moves, e.g., Amazon at one point had a tie-up with Realogy for a short time in 2019, and Google invests in proptech startups). Zillow’s data and brand moat have kept such giants at bay for now.

Summary: Zillow sits at the top of the online real estate world, but must continuously watch its flanks. Redfin remains an innovative foe with a different model (and soon with Rocket’s backing), Opendoor commands a unique instant-sale niche (which Zillow leverages via partnership), Realtor.com is a steady #2 catering to agents and brokers more traditionally, and CoStar/Homes.com is an aggressive newcomer attacking Zillow’s agent monetization model. Meanwhile, thousands of traditional brokerages, while not direct competitors to the portal business, are stakeholders that Zillow needs on its side (or at least not antagonistic).

Zillow’s competitive advantages are clear: scale of audience, brand recognition, richest data, and a broad portfolio of services. Its disadvantages or vulnerabilities? Perhaps that success attracts regulators (as we see with FTC interest) and that being the incumbent means everyone is aiming for you. Zillow has to balance between keeping real estate professionals (agents, landlords) happy and not disintermediating them, while also delivering the best product for consumers. It’s a tricky balance, but so far Zillow has navigated it well enough to maintain leadership.

As the space evolves, watch for how the Redfin-Rocket deal materializes (could a combined search + mortgage platform chip away at Zillow?), whether CoStar’s Homes.com can continue its growth trajectory (it doubled traffic but still far behind Zillow), and if Opendoor can truly become a mainstream option for sellers (if iBuying rebounds, does Zillow stay content as a partner or reconsider doing more?). Zillow’s strategy of being collaborative and Switzerland-like (partnering with former rivals, integrating others’ services) indicates it will likely try to co-opt emerging threats rather than fight head-on – a strategy that has worked to keep it strong at the center of the real estate web.

Outlook and Forecast: Where Zillow is Headed

Looking ahead, Zillow faces both promising opportunities and notable risks. Here’s an outlook on the short-term, mid-term, and long-term prospects, along with potential risks and considerations for investors:

Short-Term (Q4 2025 – Early 2026): Zillow’s own Q4 2025 guidance is upbeat. The company expects revenue of $645–$655 million and Adjusted EBITDA of $145–$155 million ^[149]. At the midpoint, that’s ~15% YoY revenue growth and an EBITDA margin around 23%. Notably, Zillow forecasts Rentals revenue to rise over 45% YoY in Q4 ^[150], an acceleration from Q3’s 41% – implying continued strength in multifamily advertising demand. The For Sale segment is guided to grow high-single-digits (% YoY) ^[151]; management said they assume the overall residential market stays sluggish but slightly better than Q3. Mortgages are expected to grow ~20% in Q4 ^[152], which actually assumes some deceleration from Q3’s 36% – perhaps a conservative stance due to mortgage rate volatility. Zillow also indicated Q4 EBITDA expenses will be lower sequentially (Q3 was $500M, Q4 expected a bit less) due to seasonality and cost discipline ^[153]. All this suggests Zillow should post a solid Q4 with further profit and revenue gains.

If Zillow meets or exceeds these targets, the stock could get a further lift, especially if accompanied by any hint of housing market stabilization. In early 2026, the housing market is a wild card: many economists predict the Fed might start cutting interest rates by mid-to-late 2026 if inflation is under control. Any signal of lower rates tends to be positive for real estate stocks like Zillow, as it portends higher transaction volumes. Zillow’s short-term stock performance will likely mirror macro news – e.g., if mortgage rates dip below 7%, one might see renewed optimism (and vice versa). Seasonality: The first half of the year (spring season) is usually stronger for home sales, so Zillow’s Q1 and Q2 2026 could see a pickup in Premier Agent revenue if buyer traffic converts better in a spring market.

Mid-Term (2026–2027): Zillow management is targeting mid-teens annual revenue growth and steady margin expansion over the next few years ^[154]. External analysts broadly mirror this: consensus models (as per Bloomberg and FactSet) have Zillow growing ~13–16% per year through 2027, with EBITDA margins rising to high-20s%. For example, Benchmark’s outlook of 27% EBITDA margin in 2026 ^[155] and UBS’s forecast of ~26.6% margin ^[156] both imply further efficiency gains. Achieving this will depend on a recovering real estate market plus Zillow continuing to execute on monetization of rentals, new construction, and new products (like Showcase). If home sales volumes bounce back to pre-pandemic norms by 2026, Zillow could see a nice tailwind in its core agent advertising business – essentially growing just from market recovery in addition to any market share gains.

One mid-term development: integration of Redfin (if acquired by Rocket). By 2026, if that merger goes through, we might see a stronger combined competitor. Rocket could, for instance, pump money into Redfin’s website or funnel their mortgage customers to Redfin’s agents. This could marginally eat into Zillow’s lead flow or audience growth if not countered. Zillow might respond by deepening ties with other large brokerages or even exploring partnerships with mortgage firms (though it has Zillow Home Loans, it might partner where it doesn’t have presence).

Another mid-term factor: Homes.com’s trajectory. If CoStar’s Homes.com keeps rising and perhaps hits say 60–80% of Zillow’s traffic by 2026, Zillow might feel pressure to adjust pricing or innovate more to ensure agents stick with them. In a scenario where Homes.com grabs meaningful share, agents could split budgets or demand lower cost leads from Zillow. Zillow likely will emphasize its superior conversion and the whole “super app” value (Homes.com is currently just a listings portal without the ancillary services Zillow offers).

However, Zillow’s brand loyalty among consumers is strong; a moderate traffic share loss might not directly translate to revenue loss if Zillow remains the platform of choice for serious transactors. The market could end up with two giants (like Zillow and CoStar) splitting the pie, which might change the economics a bit but also potentially validate Zillow’s model (that online advertising for real estate is a must-have).

Long-Term (2028 and beyond): Long-term, Zillow’s vision is to be the digital hub for housing – akin to how Amazon is for retail. This means capturing more of the transaction economics (via ancillary services like mortgage, title, rental payments) and making the process radically easier with tech. If Zillow executes, by 2030 one could imagine a scenario where buying or renting a home is a mostly online, one-click type experience for a significant share of consumers, facilitated by Zillow’s platform. That could open new revenue streams (taking a slice of transaction value, not just advertising). Zillow’s CEO has spoken of a future where Zillow helps with “moving services, home insurance, home improvement” etc., essentially monetizing the lifecycle beyond just the initial sale.

Financially, the long-term potential could be significant: the U.S. real estate transaction market (commissions, etc.) is hundreds of billions of dollars. Zillow’s $2-3B revenue is a tiny sliver of that, so there is room to grow if digital share increases. On the other hand, disrupting the entrenched real estate transaction process is hard and slow – agents and local practices still hold sway. So Zillow’s long-term may not involve displacing agents (they likely remain central) but empowering them and taking a platform fee.

From a stock perspective, if Zillow in the long run proves it can consistently grow revenues double digits with 30%+ margins, it would warrant a premium valuation as a high-margin, growth tech company. There’s also always the possibility of M&A: Zillow itself could be an attractive acquisition target for a larger tech or media company wanting a slice of real estate (though the dual-class share structure would make it complicated unless founders agree). Alternatively, Zillow might acquire smaller players to fill gaps (one could see Zillow acquiring a rental platform or a mortgage fintech to boost tech).

Risks and Challenges:

Housing Market Dependency: The biggest risk is macro. Zillow’s fortunes are tied to the housing sector. If interest rates remain very high or climb further, and the U.S. enters a recession, home sales could stagnate or drop further. In a severe scenario (e.g., sales fall another 20%, home prices decline significantly), agents would cut ad spend, and Zillow’s revenue could flatten or even decline. We saw this in late 2022 when the market froze – Zillow’s YoY revenue actually declined for a couple quarters. While diversification into rentals provides some cushion, a deep recession hitting renters (job losses, etc.) could even slow the rentals growth. Thus, a “hard landing” economic scenario is a clear risk to Zillow hitting its growth targets.
Regulatory/Legal: The FTC lawsuit is one regulatory overhang ^[157]. If Zillow and Redfin are forced to unwind their partnership, Zillow might lose exclusive content from Redfin or face more competition in multifamily ads. Potential fines or conduct remedies could also increase compliance costs or limit certain business tactics. Outside of antitrust, Zillow also deals with data privacy laws, MLS regulations, and occasional litigation (e.g., in 2023 Zillow settled a case about recording users’ website keystrokes without consent). Regulatory scrutiny tends to increase as companies dominate an industry, and Zillow is now dominant in online listings. Investors will watch if FTC or others also scrutinize Zillow’s overall market power. A possible scenario is regulators pushing for more data sharing or open access in listings (for example, ensuring multiple portals can list all properties, leveling the field). Zillow’s rich trove of user data also means it must be careful with privacy and cybersecurity – a breach or misuse of data could harm its reputation.
Competitive Pressure and Innovation Pace: As detailed, competition is heating up. Zillow has to keep innovating to stay ahead. If a rival builds a better mousetrap (say, a more addictive mobile experience or an agent-friendly portal that pulls listings away), Zillow could see engagement slip. For instance, if younger users decide some new app (maybe a TikTok-style home shopping app) is more fun and useful, Zillow’s growth in users could stall. Zillow’s answer has been to implement cutting-edge features (AI, 3D, etc.), but tech moves quickly. The rise of VR/AR in home shopping could be both an opportunity and threat – Zillow is working on 3D tours and even immersion with drone footage (its SkyTour gives an aerial neighborhood view ^[158]), but others are too. It will need to invest continuously in R&D, which could weigh on near-term profits but is necessary for long-term moat.
Execution Risks: Internally, Zillow has undergone leadership changes (new CEO in 2025, Jeremy Wacksman, after Rich Barton, though Barton remains Chairman). Integrating past acquisitions (ShowingTime, Bridge Interactive, StreetEasy tech, etc.) and aligning teams under one vision is ongoing work. There’s execution risk in its expansion into mortgages and rentals – those businesses have different dynamics than the core ad business. For example, scaling Zillow Home Loans requires compliance with banking regulations and risk management that are outside Zillow’s traditional domain. So far defaults are low (since mostly prime purchase loans), but any snafu there could cause issues. Rentals involve dealing with potentially millions of landlords and tenants – customer support and platform reliability there are crucial (a glitch that double-charges rents or fails to send applications could tarnish trust). As Zillow increases its scope, it must execute well on multiple fronts simultaneously.
Investor Expectations: Zillow’s stock valuation embeds a lot of optimism. If Zillow were to stumble on growth or margins, the stock could be volatile. For instance, if revenue growth dipped to single digits (perhaps due to macro or a misstep), Zillow’s premium valuation could compress quickly. Investors expect Zillow to at least hit its mid-teens growth plan; any shortfall might cause a sharp re-rating. Conversely, outperforming those targets could drive significant stock appreciation, given the leverage in the model.
Potential Opportunities (Upside): On the flip side, there are catalysts that could provide upside surprise: a faster housing market recovery than anticipated (e.g., mortgage rates dropping into the 5-6% range by 2026 could unleash a wave of pent-up demand), or a successful new monetization channel (for example, if Zillow Rentals starts charging property managers higher premiums or Zillow Home Loans gains significant share of purchase mortgages, driving incremental revenue). Another opportunity: international expansion – Zillow is currently only U.S.-focused. It’s not in the outlook now, but the company could one day consider partnering or expanding to other countries (however, real estate is very local and Zillow hasn’t pursued this to date, unlike some peers such as Redfin which tried a little in Canada).

In conclusion, Zillow’s outlook is cautiously optimistic. The company is guiding for healthy growth and demonstrating it can deliver even in adverse conditions. Analysts see it as one of the best-positioned players to benefit when real estate eventually rebounds. Over the next 1-2 years, success will be measured by hitting revenue targets, maintaining profitability, and growing usage – all while navigating the FTC case and keeping competitors at bay. For investors, Zillow offers a mix of tech-like growth potential with some exposure to cyclical real estate swings, which means it can be rewarding but will require a tolerance for the ups and downs of the housing market.

Many analysts advise a balanced perspective: Zillow is neither a pure-play tech stock immune to macro, nor is it a busted 2021 story – it’s evolving into a mature platform with multiple levers for growth. Those considering an investment should watch key indicators like housing turnover trends, Zillow’s quarterly Premier Agent revenue (as a proxy for market health), and progress in newer initiatives like rentals monetization and mortgage attach rates. Also essential is monitoring the competitive landscape for any seismic shifts (like the outcome of Redfin’s acquisition or CoStar’s moves).

As of end of 2025, Zillow appears to be on a solid path: leading the pack, investing in the future, and positioned to ride the next housing up-cycle when it comes. But it will need to execute diligently and adapt to whatever the market and regulators throw its way. The next few quarters – and the resolution of the FTC case – should provide more clarity on just how large Zillow’s opportunity ahead truly is, and whether it can continue converting its market dominance into sustained financial gains.

Sources:

Zillow Group Q3 2025 Financial Results – Press Release, Oct 30, 2025 ^[159] ^[160] ^[161]
Zacks Equity Research / Nasdaq – “Zillow Group’s Q3 EPS Lags Estimates, Revenues Grow Y/Y”, Oct 31, 2025 ^[162] ^[163]
Investing.com – “Zillow stock reaffirmed at Buy by Benchmark amid housing market challenges”, Oct 31, 2025 ^[164] ^[165]
Atlanta News First – “FTC sues Zillow, Redfin over alleged rental market deal”, Oct 7, 2025 ^[166] ^[167]
Thunderbit Blog – “Zillow 2025: Growth and Market Overview”, Jun 17, 2025 ^[168] ^[169]
TS2.tech – “Opendoor’s Meteoric 1600% Rally – Real Estate Disruptor Soaring or Stumble Next?”, Oct 31, 2025 ^[170] ^[171]
HomeLight – “Redfin vs Zillow: How the Two Real Estate Websites Compare”, Mar 21, 2025 ^[172] ^[173]
Zillow Investor Relations – “Zillow brings AI-powered Virtual Staging to Showcase listings”, Sep 10, 2025 ^[174] ^[175]
Marketlog – Zillow Inc. stock summary (market cap, performance) ^[176] ^[177]
Nasdaq.com – Zillow Group Class C (Z) historical quotes, Oct 2025 ^[178]

Zillow Q3 2025 Earnings Beat: Rentals & Mortgages Soar Despite Market Fears

Watch this video on YouTube.

References