Zillow (ZG) Stock Forecast & Price Target

Zillow Group is positioned to benefit from a stronger monetization mix as Preferred connections rise toward 75% to 80% by year-end and full rollout is expected by Q2 next year, lifting revenue per connection about 35% above legacy levels. Its integrated platform across Residential, Zillow Home Loans, Rentals, and agent software creates multiple upsell paths, while Zillow Home Loans carries an implied roughly 20-point margin advantage from near-zero customer acquisition costs and profitable unit economics. Fundamentally, the company is improving conversion and engagement through Follow Up Boss, AI Mode, and richer inventory, while 2Q'26 results of $772M revenue and $176M adjusted EBITDA show that growth and margin expansion are already translating into performance.

Zillow Group is facing a difficult macro backdrop as mortgage-to-income remains around 34%, above the roughly 30% level needed to revive transaction volume, while softer high-end demand and no near-term catalyst suggest continued pressure on housing activity. The company’s core residential business appears vulnerable as inventory and transactions stay depressed, Premier Agent growth is challenged, and the shift to Preferred creates a 200-300 bps headwind to For Sale revenue plus a near-term EBITDA drag, with 3Q total revenue guided at $745M-$760M and adjusted EBITDA at $180M-$200M. Ongoing risks from rising rates, inflation, lower realtor ad budgets, home price volatility, and incremental investments that could slow margin expansion reinforce a negative fundamental outlook.