Zillow’s Strong Earnings Fail to Impress as Stock Slides Despite Profit Milestone
Zillow Group marked a significant turnaround with its first GAAP-compliant annual profit since 2012, reporting $0.09 EPS on $2.58 billion revenue for 2025. The Q4 performance outstripped expectations with 18% revenue growth to $654 million and a $3 million net income reversal from prior losses. Yet shares tumbled 4.5% post-announcement, extending a 20% YTD decline.
The rentals segment emerged as a standout performer, boasting 45% quarterly and 39% annual growth. Forward guidance suggests continued momentum with Q1 2026 revenue projections ($700-710M) exceeding analyst forecasts. Market reaction underscores investor skepticism about sustainability in a cooling housing market, despite the company's operational achievements.