Zillow Group (NASDAQ:Z) Shares Gap Down - Here's Why

Key Points

• Zillow shares plunged 11.5%, opening at $30.81 versus a prior close of $36.10, after the company issued below-consensus third-quarter revenue guidance and was downgraded by Zacks from “strong buy” to “hold.”
• Zillow beat second-quarter earnings and revenue expectations, but reported a $4 million net loss because of $36 million in restructuring costs and plans to eliminate more than 500 jobs, or about 7% of its workforce.
• Although July home sales rose 7% year over year, sharply lower pending sales amid rising mortgage rates point to a potentially weaker second half; analysts still hold a “Moderate Buy” consensus with a $72.38 target price.

Zillow Group, Inc. (NASDAQ:Z - Get Free Report)'s share price gapped down prior to trading on Thursday . The stock had previously closed at $36.10, but opened at $30.81. Zillow Group shares last traded at $30.9570, with a volume of 1,466,165 shares changing hands.

More Zillow Group News

Here are the key news stories impacting Zillow Group this week:

• Positive Sentiment: Zillow reported second-quarter adjusted earnings of $0.52 per share, above the roughly $0.44–$0.45 consensus estimate, while revenue increased 18% year over year to $772 million, exceeding expectations of about $758 million. Zillow Surpasses Q2 Earnings and Revenue Estimates
• Positive Sentiment: Home sales rose 7% year over year in July, the strongest annual increase of 2026, providing evidence of improving transaction activity. Zillow July Market Report
• Neutral Sentiment: Zillow expanded Chief Financial Officer Jeremy Hofmann’s responsibilities to include chief operating officer and appointed Cassandra Knight as its first chief legal and policy officer, alongside promotions for two senior executives. The changes could improve execution but also underscore a broader restructuring. Zillow Executive Leadership Changes
• Negative Sentiment: Zillow plans to eliminate just over 500 jobs, or approximately 7% of its workforce, in a second round of cuts this year. Management cited a flat housing market; the layoffs may reduce costs but signal weaker near-term demand. Zillow Layoffs
• Negative Sentiment: Zillow posted a $4 million net loss as $36 million of restructuring costs outweighed its revenue gains, compared with analysts’ expectation for approximately $21 million of net income. Zillow Swings to Loss
• Negative Sentiment: Third-quarter revenue guidance of $745 million to $760 million came in below the $772.3 million consensus, while full-year guidance of $2.9 billion to $3.0 billion was at or below expectations. Shares also faced a Zacks downgrade from “strong buy” to “hold.”
• Negative Sentiment: Pending sales fell sharply from June as mortgage rates reached their highest level in a year, suggesting July’s sales increase may not persist and raising concerns about a slower second half. Zillow Housing Market Outlook
• Negative Sentiment: Multiple law firms publicized securities-fraud class-action claims tied to alleged misrepresentations concerning Zillow’s business practices. The allegations remain unproven, but the litigation creates additional reputational and potential financial risk.

Wall Street Analyst Weigh In

Several equities research analysts recently commented on Z shares. Royal Bank Of Canada cut their target price on shares of Zillow Group from $95.00 to $70.00 and set an "outperform" rating on the stock in a research report on Wednesday, June 10th. Zacks Research cut shares of Zillow Group from a "strong-buy" rating to a "hold" rating in a research report on Tuesday. Weiss Ratings downgraded shares of Zillow Group from a "sell (d+)" rating to a "sell (d)" rating in a research note on Friday, May 22nd. Wall Street Zen upgraded shares of Zillow Group from a "hold" rating to a "buy" rating in a report on Saturday, May 9th. Finally, Jefferies Financial Group reduced their price objective on shares of Zillow Group from $75.00 to $60.00 and set a "buy" rating on the stock in a research note on Tuesday, July 14th. Two research analysts have rated the stock with a Strong Buy rating, six have assigned a Buy rating, seven have assigned a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $72.38.

Zillow Group Stock Down 11.5%

The stock has a 50 day moving average of $33.12 and a 200 day moving average of $41.84. The company has a market capitalization of $7.31 billion, a price-to-earnings ratio of 127.06, a price-to-earnings-growth ratio of 1.55 and a beta of 1.98.

Zillow Group (NASDAQ:Z - Get Free Report) last released its earnings results on Wednesday, August 5th. The financial services provider reported $0.52 earnings per share for the quarter, beating analysts' consensus estimates of $0.45 by $0.07. The business had revenue of $772.00 million during the quarter, compared to the consensus estimate of $758.10 million. Zillow Group had a net margin of 2.27% and a return on equity of 1.41%. As a group, sell-side analysts anticipate that Zillow Group, Inc. will post 0.9 EPS for the current fiscal year.

Insider Activity at Zillow Group

In related news, Director Erik C. Blachford sold 791 shares of Zillow Group stock in a transaction on Monday, June 8th. The shares were sold at an average price of $34.80, for a total transaction of $27,526.80. Following the completion of the transaction, the director owned 34,952 shares of the company's stock, valued at $1,216,329.60. This trade represents a 2.21% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Jeremy Wacksman sold 9,072 shares of the business's stock in a transaction on Friday, May 22nd. The shares were sold at an average price of $36.54, for a total transaction of $331,490.88. Following the completion of the transaction, the chief executive officer owned 153,699 shares in the company, valued at approximately $5,616,161.46. The trade was a 5.57% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 42,910 shares of company stock valued at $1,605,732 over the last 90 days. 25.03% of the stock is owned by company insiders.

Institutional Investors Weigh In On Zillow Group

Institutional investors and hedge funds have recently made changes to their positions in the business. V Square Quantitative Management LLC bought a new stake in Zillow Group in the fourth quarter worth approximately $28,000. Flagship Harbor Advisors LLC bought a new position in shares of Zillow Group during the 4th quarter worth approximately $43,000. Leonteq Securities AG boosted its holdings in shares of Zillow Group by 627.0% during the 1st quarter. Leonteq Securities AG now owns 1,345 shares of the financial services provider's stock worth $56,000 after buying an additional 1,160 shares in the last quarter. EverSource Wealth Advisors LLC grew its position in shares of Zillow Group by 283.2% during the 1st quarter. EverSource Wealth Advisors LLC now owns 1,414 shares of the financial services provider's stock worth $59,000 after buying an additional 1,045 shares during the period. Finally, IFC & Insurance Marketing Inc. acquired a new stake in shares of Zillow Group during the 4th quarter worth approximately $68,000. Institutional investors own 71.01% of the company's stock.

About Zillow Group

Zillow Group, Inc is an online real estate marketplace company that operates a portfolio of consumer-facing websites and mobile apps designed to connect buyers, sellers, renters, homeowners and real estate professionals. The company's platforms aggregate property listings, rental listings, and related information to help users search for homes, estimate property values and connect with agents and service providers. Zillow generates revenue primarily through advertising and lead-generation services for real estate professionals, property managers and mortgage lenders.

Key products and services include the Zillow and Trulia consumer websites and apps, which provide searchable listings, photos, neighborhood data and the company's automated home valuation tool known as the “Zestimate.” Zillow also offers a rentals marketplace, a mortgage marketplace and tools for home buying and selling such as Zillow Premier Agent for agent advertising and leads, as well as ancillary services designed to support transactions, including closing and title-related offerings.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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