Abstract
Zillow Group will report third-quarter 2026 results on November 04, 2026 Post-Mkt; this preview compiles current-quarter consensus and recent operating signals to assess revenue, profitability, and the traction of key initiatives across Residential, Rentals, and Mortgages.Market Forecast
Consensus models point to Zillow Group delivering approximately 754.22 million US dollars in revenue for the quarter, up 12.46% year over year, with adjusted EPS anticipated at 0.59, up 37.18%, and EBIT at 38.95 million US dollars, up 471.13%. Management did not provide a quantifiable revenue or profit guide last quarter, so investors are using execution milestones, progress of the Preferred monetization model, and segment momentum to frame expectations.Residential remains the largest contributor and is expected to show steady growth paced by Preferred connections, Showcase adoption, and plug-in software attach, while near-term margin optics may reflect the ongoing transition. The Rentals segment is seen as the most promising growth engine: revenue reached 209.00 million US dollars last quarter and earlier this year rose 42% year over year to 183.00 million US dollars, supported by multifamily budgets and improved ad conversion.
Last Quarter Review
Zillow Group’s previous quarter delivered revenue of 772.00 million US dollars (up 17.86% year over year), a gross profit margin of 72.80%, GAAP net loss attributable to shareholders of 4.00 million US dollars, a net profit margin of -0.52%, and adjusted EPS of 0.52 (up 30.00% year over year).One highlight was better-than-expected top- and bottom-line performance versus consensus, with revenue exceeding estimates by 13.70 million US dollars and adjusted EPS topping by 0.07. The business mix showcased balanced contributions—Residential at 465.00 million US dollars, Rentals at 209.00 million US dollars, Mortgages at 84.00 million US dollars, and Other at 14.00 million US dollars—while Rentals continued to show robust momentum, having increased 42% year over year to 183.00 million US dollars in the first quarter and scaling further last quarter.
Current Quarter Outlook (with major analytical insights)
Residential: largest revenue driver, navigating a model transition
Residential continues to anchor revenue, with 465.00 million US dollars in the prior quarter, and it remains closely watched for how the postpaid Preferred model converts engagement into monetization. During the transition, a portion of formerly higher-margin, upfront, and co-marketing revenue is being replaced by performance-based economics and incremental attach of services such as CRM integrations and Showcase; this can obscure near-term visibility in margins even when unit economics are improving. Execution will be judged on the breadth and depth of Preferred connections, their take rates and conversion to downstream services, and whether the attach of Mortgages and software tools scales adequately to offset the revenue recognition shift intrinsic to the postpaid structure. With consensus expecting total revenue to advance 12.46% year over year, Residential performance is likely to align with this blended growth while margins may still reflect investment and mix effects.Operationally, the key markers this quarter are penetration of Preferred connections and advertising modernization, including Showcase placements and lead quality outcomes. Commentary from recent months suggested Preferred penetration tracking toward the mid-to-high 70% range by year-end, which would materially increase the share of revenue influenced by downstream services attachment rather than just media impressions. That transition should improve lifetime value and reduce cyclicality once the model stabilizes, though investors may accept some short-term margin compression for sustained long-run monetization capacity. The primary risk to Residential’s print is macro demand sensitivity—pricing power and volume throughput can be affected by mortgage rate volatility and listing cadence—yet execution on the model shift remains the higher-impact internal variable for investor sentiment this quarter.
Rentals: strongest growth trajectory with improving conversion
Rentals has been the most resilient growth area in recent quarters, with revenue at 209.00 million US dollars last quarter and a 42% year-over-year increase to 183.00 million US dollars in the first quarter earlier this year, reflecting strong multifamily spending and product upsells. The segment continues to benefit from robust multifamily supply and elevated concession activity that keeps marketing budgets active, with partners focused on occupancy and qualified leads rather than broad cost cuts. Platform enhancements are also improving engagement and conversion: an AI assistant embedded in listings has been associated with a higher probability of application completion, indicating practical productivity gains for property managers and better user throughput in the leasing funnel. These factors underpin the view that Rentals remains the company’s most promising growth engine into the current quarter.For this print, investors will look for sustained double-digit growth in Rentals and evidence of durable ad budgets across multifamily clients. A key indicator is whether lead quality and application rates stay elevated, which would support both price realization and retention into the seasonally slower winter months. The pathway to monetization long term includes layered products beyond core listing exposure—lead nurturing, messaging automation, and integrations that reduce leasing friction—so commentary on cross-sell and client product adoption will be central to the Rentals narrative. The primary swing factor for near-term optics is seasonality and how much of the strong summer leasing cycle carries through into late quarter; however, recurring adoption of productivity tools should help smooth the cycle as clients standardize these workflows.
What will move the stock this quarter
The first swing factor is the magnitude and mix of any surprise relative to consensus on revenue (754.22 million US dollars), adjusted EPS (0.59), and EBIT (38.95 million US dollars). Because the business is mid-transition, a modest headline beat can be overshadowed or amplified by commentary about timing and recognition of Preferred-related revenue, so qualitative guidance around attach rates, conversion quality, and the sequencing to full-penetration matters. A second swing factor is clarity on the Preferred model’s penetration and monetization ramp; investors will listen for updated penetration percentages, downstream product attach to Mortgages, Showcase, and CRM, and whether the company still expects meaningful normalization and margin uplift after the transition period.A third catalyst is legal and regulatory clarity. Recent developments included an FTC-and-states settlement related to a partner program and mixed outcomes in regional antitrust proceedings in the housing information flow space; management’s confirmation that no systemic constraints are expected would help reduce the legal overhang implied by earlier headlines. Product updates are a complementary catalyst—expanding AI integrations, new connectors, and assurances on data boundaries and privacy signal that innovation can progress without creating undue risk, an area of sensitivity for investors following recent announcements. Finally, commentary on Mortgages is a tactical catalyst: earlier this year purchase loan origination volume rose sharply from a low base, and investors will weigh whether that momentum is sustainable amid rate volatility and how it contributes to the integrated monetization thesis within the Preferred framework.
Analyst Opinions
Among tracked views this year, bullish opinions outnumber bearish ones, and the majority stance leans positive on the setup into this quarter. One constructive theme is that the transition to a Preferred, performance-based model is creating near-term complexity but sets up higher long-term monetization as connections expand and downstream services such as Mortgages, Showcase, and CRM tools attach with better unit economics. Another is that Rentals appears well-placed to deliver sustained growth supported by multifamily budgets and measurable improvements in lead conversion and application throughput.Piper Sandler maintains a Buy view with a 46.00 US dollars price target, emphasizing the multi-year opportunity to expand monetization across the core audience by deepening product attach and improving performance metrics inside the lead-to-transaction funnel. The firm’s stance highlights that while near-term revenue recognition shifts and seasonality can cloud quarter-to-quarter readings, the trajectory of Preferred penetration and cross-sell is the right indicator of eventual revenue and margin cadence. RBC Capital Markets has been constructive on the same vectors, pointing to momentum in Preferred monetization and a solid Rentals upsell pathway with runway into 2027. Their view underscores that the model transition intentionally trades immediate margin clarity for higher lifetime value and that ongoing execution should reduce cyclicality once the program matures.
The broader analyst set remains supportive: across recent surveys, the average rating tilts to overweight with an aggregate price objective in the mid-40s, consistent with a positive skew in expectations for execution. The bullish camp’s central argument is that the marketplace continues to demonstrate healthy engagement, and as monetization migrates from impression-based constructs toward transaction-linked economics with identifiable product attach, operating leverage should improve. Those positive views are reinforced by data points from earlier this year—Rentals growth of 42% year over year in the first quarter and notable gains in mortgage purchase origination volume—suggesting that the ecosystem’s integrated approach can convert traffic into revenue across multiple nodes of the housing journey.
Entering this quarter, the bullish consensus focuses on three validation points. First, evidence that the Preferred connections are tracking toward high-70% penetration by year end, with updated commentary that supports full penetration in the following quarters. Second, confirmation that Rentals is sustaining double-digit growth with stable multifamily marketing budgets and rising product attach—especially where AI-enabled tools drive higher application conversion. Third, clarity that legal developments do not impose structural limitations on distribution or partner monetization. If management provides color consistent with these themes, the majority view expects revenue near or modestly above consensus, improving EBIT, and continued progress on adjusted EPS year over year.
On balance, the majority stance is bullish: the anticipated 12.46% year-over-year revenue increase and 37.18% rise in adjusted EPS reflect improving earnings power through the transition. The key debate for bulls is less about immediate gross margin expansion and more about validating unit economics that support normalized margin uplift as the Preferred model scales and as cross-sell deepens. This framework implies that a clean, execution-focused message—detailing conversion, attach, and recognition timing—could carry as much weight for the stock as the absolute magnitude of any numerical beat or miss this quarter.
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