Cantor Fitzgerald lowered its price target on Zillow Group to $56.00 from $68.00 and kept a Neutral rating following the real estate marketplace's fourth-quarter results. At the time of the analyst action, Zillow shares were trading at $44.58, down sharply from a prior close of $53.94 and trading near the stock's 52-week low.
Zillow reported mixed signals in its latest quarter. Total revenue came in at $2.58 billion, representing overall revenue growth of 15.52%. On the bottom line, reported EBITDA was 1% below prior Street estimates even as revenue beat by roughly 1%.
Performance across Zillow's lines of business diverged. For Sale revenue accelerated to 11% year-over-year growth in the fourth quarter, reflecting continued traction in that part of the platform. Rentals showed a stronger contribution, with growth improving by 3 percentage points to 45% year-over-year in the quarter.
Looking ahead, Zillow provided first-quarter revenue guidance that is approximately 2% above Street expectations. However, the company tempered profitability guidance, calling for EBITDA that is about 8% below consensus. Zillow attributed the weaker-than-expected EBITDA outlook to roughly 200 basis points of incremental legal expenses in the quarter.
For full-year 2026, Zillow projects mid-teens percentage revenue growth and expects margin expansion of 180 basis points. Analysts tracking the company anticipate improvement in profitability over time, with consensus EPS projected at $1.74 for fiscal 2026.
Cantor Fitzgerald noted several themes in its assessment. The firm highlighted Zillow's view that the housing market is likely to remain choppy in 2026 and reiterated that the company faces a number of ongoing legal challenges. At the same time, the analyst acknowledged operational progress driven by product initiatives aimed at homebuyers and agents.
From a balance sheet and liquidity perspective, Zillow appears to retain flexibility. The company reported a current ratio of 3.13, which indicates more cash and current assets than current liabilities on the balance sheet.
Market performance this year has been weak relative to broader technology and growth benchmarks. Zillow shares have underperformed the Nasdaq, falling about 20% year-to-date with a year-to-date decline of approximately 20.24%. Cantor Fitzgerald observed that the shares still trade at about 15 times estimated FY26 EBITDA, a premium relative to the company’s projected growth profile.
Analyst sentiment beyond Cantor Fitzgerald is mixed. Bernstein reiterated an Outperform rating and set a $95.00 price target, pointing to a favorable legal ruling as a constructive development for investor sentiment. Evercore ISI also maintained an Outperform rating ahead of the fourth-quarter earnings print, expecting a modest beat based on intra-quarter indications and Zillow’s track record.
Conversely, Canaccord Genuity trimmed its price target to $72.00, citing legal costs weighing on profitability, while KeyBanc reduced its target to $75.00 on account of lower tech stock multiples, though it kept an Overweight rating.
The quarter contained additional operational details that underscore a mixed but improving picture. Residential growth showed a sequential pickup of 60 basis points, driven in part by the scaled rollout of Zillow’s Enhanced Markets, which now account for 44% of all connections. On the legal front, the company received a favorable ruling in its dispute with Compass when a federal judge allowed Zillow to continue enforcing its listing rules while Compass’s antitrust lawsuit progresses.
In sum, Zillow’s latest results reflect moderate top-line momentum and continued investment in operations even as legal costs create near-term pressure on profitability. Analysts are split between optimism around long-term margin recovery and caution driven by litigation expenses and valuation considerations.
Key metrics and takeaways
- Total revenue: $2.58 billion; revenue growth: 15.52% year-over-year.
- For Sale revenue growth in Q4: 11% year-over-year; Rentals growth: 45%, up 3 percentage points sequentially.
- First-quarter revenue guidance: ~2% above expectations; first-quarter EBITDA guidance: ~8% below expectations due to ~200 basis points of additional legal costs.