Zillow's Revenue Miss and $158 Million Loss Expose a Housing Slowdown — But Has the Stock Fallen Far Enough?

Shares cratered 17.4% to $28.00 in after-hours trading after Zillow Group reported third-quarter results that fell short on nearly every metric Wall Street cared about. For a stock already down more than 50% in 2026, the question is whether the punishment now exceeds the crime — or whether a slowing housing market and mounting legal costs have permanently altered Zillow's growth story.

Revenue Growth Cut in Half, and the Street Noticed. Zillow posted $724 million in Q3 revenue, falling short of the $754.1 million analysts expected. That's just 7% year-over-year growth — a sharp deceleration from the 18% growth posted in Q2 . For Sale revenue was flat year over year at $489 million , a worrying sign given that this segment — which includes fees from agents and home sales — makes up the bulk of Zillow's business. Rising mortgage rates above 6.5% have been squeezing affordability , throttling the home-buying activity Zillow depends on.

A $158 Million GAAP Loss Overshadows Adjusted Profits. Net loss hit $158 million, or $0.70 per share, compared with a small profit of $0.04 per share a year ago.

On an adjusted basis — stripping out stock-based compensation and other non-cash items — Zillow earned $0.55 per share , but that still missed the $0.60 Wall Street consensus . The gap between adjusted and GAAP results has widened dramatically: in Q1, Zillow reported $46 million in GAAP net income . Legal expenses from the FTC antitrust fight and a securities class-action lawsuit are key culprits driving the deterioration.

Legal Overhang Settled, but Costs Linger. Zillow settled with the FTC in August over allegations it paid Redfin $100 million to exit the rental advertising market.

The partnership survives through at least June 2030 , but Redfin must now re-enter rental advertising — reintroducing a direct competitor to Zillow's fastest-growing segment. Zillow was also cut off from more than 30,000 listings in Chicago , adding competitive pressure.

A Stock Near Its Floor, but Investors Want Proof. Shares are hovering just above their 52-week low of $27.25 , while the average analyst price target sits at $50.81 . That implies roughly 80% upside — but only if housing recovers and legal distractions fade. With rate cuts nowhere in sight and growth decelerating, Zillow's turnaround pitch is getting harder to sell.