Zillow's Mixed Quarter: Analysts See Strong Execution But Caution On 2025 Guidance

Zillow Group, Inc. ZG shares are trading lower after the company reported mixed results on Tuesday.

The company reported fourth-quarter adjusted EPS of 27 cents, missing the consensus of 28 cents, while sales of $554 million exceeded the $545.9 million estimate.

Zillow expects first-quarter sales of $575 million to $590 million, below the $600.9 million estimate.

Zillow expects 2025 revenue growth in the low to mid-teens, along with continued Adjusted EBITDA margin expansion and full-year GAAP profitability.

Some analysts revised the price forecast on the stock.

Piper Sandler analyst Thomas Champion cut the price forecast from $93 to $90 while retaining an Overweight rating.

The analyst writes that the company posted mixed results, exceeding his expectations but starting 2025 with a measured outlook, guiding 11% revenue growth vs. 17% in the fourth quarter.

Champion sees this as conservatism, as the company is still executing well across Touring, Mortgage, and Rentals toward its $5 billion revenue goal.

The analyst slightly lowered estimates for FY25 revenue and EBITDA by 3% and 12%, respectively, to reflect the cautious guidance.

Meanwhile, Cantor analyst Deepak Mathivanan raised the price forecast from $62 to $70 while reiterating a Neutral rating.

The analyst says Zillow delivered revenues and EBITDA beat despite a volatile real estate market. However, its first-quarter guidance came in below expectations, with revenue and EBITDA at the high end, falling 2% and 12% short of consensus.

While variable costs may see some deleverage, fixed cost inflation should remain modest, adds the analyst.

The analyst says the company plans to expand EM coverage and invest in mortgages and other segments. While fundamentals remain closely tied to the broader market, ZG continues to execute well.

Mathivanan lowered the FY26 revenue and EBITDA estimates by 1% and 8%, respectively.

JP Morgan analyst Dae K Lee reiterated an Overweight rating and price forecast of $93.

The analyst writes that Zillow shares fell after the results missed high expectations and a softer housing market weighed on first-quarter guidance.

However, rentals saw record growth in listings, traffic, and revenue, with the Redfin partnership and increased sales efforts setting up 2025 for strength, adds the analyst.

Lee says that Zillow continues to outpace the industry and expand margins, reinforcing confidence in its $5 billion revenue and 45% EBITDA margin mid-cycle target.

Stephens analyst John Campbell, with an Overweight rating and $73 price target, writes that ZG entered fourth-quarter as the top-performing stock in his coverage (+18.3% YTD vs. Russell 2000 +2.6%), setting a high bar.

Despite a strong beat, near-term guidance fell short of consensus across most key metrics except Rentals. However, this aligns with ZG's conservative approach and recent housing market softness, adds the analyst.

Campbell says that, encouragingly, full-year revenue is expected near consensus, implying an in-line or better outcome for the second half of 2025 within the projected low-to-mid-teens Y/Y growth range.

RBC Capital Markets analyst Brad Erickson, with an Outperform rating and $88 price target, says that on the positive side, the company is making progress with its enhanced market strategy and highlighted its potential for outsized revenue and profit growth in 2025 and beyond, even in a slow housing market.

However, the company’s fourth-quarter performance underperformed the industry, which tempered the near-term bullish outlook, adds the analyst.

While the fourth quarter residential share loss raises concerns, the analyst remains optimistic about long-term growth driven by its enhanced market strategy, writes the analyst.

Erickson raised 2025 revenue estimates but slightly lowered EBITDA estimates, with 2026 targets now in focus.

Price Action: ZG shares are down 9.40% at $75.96 at the last check Wednesday.

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