Zillow Group (NASDAQ:ZG) Hits New 12-Month Low on Disappointing Earnings

Key Points

• Zillow hit a new 52-week low after reporting an EPS of $0.01 vs. $0.42 expected, triggering a sharp selloff (stock down ~11.3%, traded as low as $51.10 and last near $48.94).
• Revenue came in at $654 million (up 18.1% YoY) and management guided Q1 revenue of roughly $700–$710M—above Street estimates—showing top-line momentum despite the profit miss.
• Several sell-side firms trimmed price targets or moved to neutral, adding pressure, and insiders have been net sellers, although the consensus rating remains a “Moderate Buy” with an average price target around $83.63.

Zillow Group, Inc. (NASDAQ:ZG - Get Free Report) reached a new 52-week low on Wednesday following a weaker than expected earnings announcement. The stock traded as low as $51.10 and last traded at $48.9440, with a volume of 13577 shares. The stock had previously closed at $54.42.

The technology company reported $0.01 EPS for the quarter, missing the consensus estimate of $0.42 by ($0.41). The company had revenue of $654.00 million for the quarter, compared to analysts' expectations of $650.40 million. Zillow Group had a negative return on equity of 0.56% and a negative net margin of 1.29%.Zillow Group's revenue for the quarter was up 18.1% on a year-over-year basis. During the same quarter in the previous year, the firm posted $0.27 earnings per share.

Key Zillow Group News

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

• Positive Sentiment: Revenue and profit trends were constructive: Zillow reported year-over-year revenue growth (Q4 revenue ~ $654M) and swung to a small quarterly profit. This supports the case for continued top-line momentum as the housing market improves. WSJ: Zillow Swings to Fourth-Quarter Profit
• Positive Sentiment: Management issued Q1 revenue guidance of roughly $700–$710M, above Street consensus (~$691M), which could underpin near-term revenue expectations. Zillow press release
• Positive Sentiment: Some analysts and outlets remain constructive on longer-term growth prospects (Bernstein/Baron's commentary highlights continued upside if housing activity recovers). Globe & Mail: Bernstein Buy Barron's: Why Wall Street Still Likes Zillow
• Neutral Sentiment: Detailed analyses and the full earnings-call transcript are available for investors who want to dig into segment-level trends and management commentary. Earnings call transcript Zacks analysis
• Negative Sentiment: EPS materially missed consensus (company reported well below Street estimates), which was the primary trigger for the stock decline and investor concern. Yahoo: Zillow stock falls after Q4 earnings miss
• Negative Sentiment: Several sell-side firms trimmed price targets and/or moved to neutral/equal-weight after the print (Cantor Fitzgerald to $56 neutral; Wells Fargo to $61 equal weight), adding downward pressure on the stock. Benzinga: Cantor Fitzgerald PT cut Benzinga: Wells Fargo PT cut

Analysts Set New Price Targets

A number of equities research analysts recently commented on ZG shares. Wells Fargo & Company lowered their price objective on shares of Zillow Group from $73.00 to $61.00 and set an "equal weight" rating on the stock in a research note on Tuesday. UBS Group reduced their target price on shares of Zillow Group from $95.00 to $92.00 and set a "buy" rating on the stock in a report on Friday, October 31st. Royal Bank Of Canada reissued an "outperform" rating and issued a $95.00 price objective on shares of Zillow Group in a research report on Monday, December 15th. Citigroup reaffirmed a "market outperform" rating on shares of Zillow Group in a research report on Monday, January 12th. Finally, JPMorgan Chase & Co. increased their price objective on shares of Zillow Group from $94.00 to $95.00 and gave the stock an "overweight" rating in a report on Friday, October 31st. Sixteen research analysts have rated the stock with a Buy rating, twelve have given a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average price target of $83.63.

Insider Buying and Selling

In related news, Director Erik C. Blachford sold 965 shares of the company's stock in a transaction on Wednesday, December 3rd. The stock was sold at an average price of $72.51, for a total transaction of $69,972.15. Following the transaction, the director directly owned 33,543 shares of the company's stock, valued at approximately $2,432,202.93. The trade was a 2.80% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, CEO Jeremy Wacksman sold 10,855 shares of the stock in a transaction dated Friday, November 14th. The stock was sold at an average price of $69.99, for a total value of $759,741.45. Following the completion of the sale, the chief executive officer directly owned 134,712 shares of the company's stock, valued at approximately $9,428,492.88. This represents a 7.46% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last 90 days, insiders sold 28,103 shares of company stock valued at $1,956,109. Company insiders own 17.14% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently bought and sold shares of ZG. Vanguard Personalized Indexing Management LLC raised its stake in shares of Zillow Group by 3.0% during the 2nd quarter. Vanguard Personalized Indexing Management LLC now owns 4,550 shares of the technology company's stock worth $312,000 after purchasing an additional 131 shares in the last quarter. DoubleLine ETF Adviser LP boosted its holdings in Zillow Group by 4.9% in the third quarter. DoubleLine ETF Adviser LP now owns 3,214 shares of the technology company's stock worth $239,000 after purchasing an additional 150 shares in the last quarter. Wealth Enhancement Advisory Services LLC increased its position in Zillow Group by 4.5% during the third quarter. Wealth Enhancement Advisory Services LLC now owns 3,657 shares of the technology company's stock worth $256,000 after buying an additional 156 shares during the last quarter. Signaturefd LLC raised its holdings in Zillow Group by 10.4% during the fourth quarter. Signaturefd LLC now owns 1,711 shares of the technology company's stock valued at $117,000 after buying an additional 161 shares in the last quarter. Finally, Smartleaf Asset Management LLC lifted its position in shares of Zillow Group by 78.9% in the third quarter. Smartleaf Asset Management LLC now owns 424 shares of the technology company's stock worth $33,000 after buying an additional 187 shares during the last quarter. Hedge funds and other institutional investors own 20.32% of the company's stock.

Zillow Group Stock Down 11.3%

The company has a market cap of $11.68 billion, a price-to-earnings ratio of -344.48, a PEG ratio of 3.13 and a beta of 2.04. The business has a 50-day simple moving average of $66.55 and a two-hundred day simple moving average of $72.45.

About Zillow Group

Zillow Group NASDAQ: ZG is a U.S.-based online real estate marketplace that connects consumers, real estate professionals and mortgage lenders through a suite of digital products and advertising services. Founded in 2006 by Rich Barton and Lloyd Frink and headquartered in Seattle, Washington, the company operates a portfolio of consumer-facing brands and tools designed to simplify home search, rental discovery, valuation and mortgage shopping.

Zillow's core products include its consumer websites and mobile apps that list homes for sale and rent, the Zestimate automated home value estimate, and marketplaces that connect buyers and renters with agents and lenders.

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