By Shaina Mishkin
Zillow Group is on the verge of reporting its first GAAP profitable year in over a decade. The stock isn't acting like it.
Zillow's Class C shares on Monday closed at $54.28, slightly higher than the new 52-week closing low they set last week, according to FactSet data. That is despite expectations that the company will log its first year of profitability on a generally accepted accounting principals, or GAAP, basis since 2012 when it reports earnings Tuesday after the market closes.
Analysts expect that the company will report GAAP earnings of seven cents on $2.58 billion in revenue for the full year in 2025, according to FactSet. For the fourth quarter, Wall Street foresees a one-cent loss on $650 million in revenue.
You might not know it by looking at the stock's recent performance. Both the company's higher-volume Class C stock and its Class A shares are down more than 20% in 2026, after both ended 2025 lower.
Home sales have limped along since rising prices and mortgage rates snuffed out the pandemic's ultrahot seller's market several years ago. Industry upheaval hasn't helped: Zillow in 2025 was named as a defendant in a spate of lawsuits. An artificial intelligence-driven selloff in early February added to Zillow's recent pain as investors sold tech stocks.
But heading into fourth-quarter earnings, Zillow is "one of the least risky setups," a team of Evercore analysts led by Mark Mahaney wrote on Monday. The team cites expectations for strong revenue growth, potential improvement in the housing market, and the possibility of resolution in lawsuits facing the company among the reasons "we love the setup on [Zillow Class A shares] here."
The team rates Zillow Class A shares Outperform, with a price target of $95. Zillow is "a macro housing recovery play, with our belief that sub-6% mortgage rates can help unlock a home-sale market that has been significantly soft for three years," they wrote.
Buying a home is still pricey -- but buyers have seen some mortgage rate relief in recent months. Rates on 30-year fixed mortgages have eased to a recent 6.16%, while 15-year and adjustable-rate loans carry interest rates below 6%, according to Mortgage News Daily.
The analysts also foresee "a potential premium revenue growth inflection point, with Q4 likely coming in at very high-teens revenue growth, [2026's first half] offering easier comps, and all this before any material recovery in the housing market."
Zillow is best known for its home listings portal, but the company offers a variety of services for buyers, sellers, renters, and agents.
Following its exit from its hard-to-predict business buying and selling homes several years ago, Zillow has expanded its offerings for agents and focused on growing its rentals and mortgages businesses. That expansion hasn't come without challenges, including a Federal Trade Commission complaint against Zillow's rentals partnership with Redfin.
Resolutions or updates in Zillow's legal cases could help, the Evercore analysts noted. The company notched an early win in a lawsuit filed by the brokerage Compass challenging the former's listing rules. A judge on Friday denied Compass's motion for a preliminary injunction against Zillow's listing rules.
Analysts will be listening for the company's strategy on home listings moving forward, Wells Fargo Securities analyst Alec Brondolo wrote in a Monday note. The analyst rates Zillow Class A stock Equal Weight with a $61 price target. "Zillow's commentary around private exclusives is the most important factor on earnings," the analyst wrote. "We continue to believe ZG needs new, more novel tactics to compete with [Compass's] private exclusives."
Write to Shaina Mishkin at shaina.mishkin@barrons.com
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February 10, 2026 03:00 ET (08:00 GMT)
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