Zillow Group Class A (ZG) AI Stock Analysis

Company Guidance

Zillow's guidance called for Q3 revenue of $745–760M (~+11% YoY at the midpoint), for‑sale growth of 5–7% with residential expected to be flat and mortgages >50% YoY, rentals growth in the high‑20% range, Q3 EBITDA expenses of $560–565M and EBITDA of $180–200M (~25% margin at the midpoint). For full‑year 2026 management reiterated mid‑teens total revenue growth with a $2.92–2.96B revenue range, ~30% rentals growth, and EBITDA of $730–760M, and said share‑based compensation should be down >15% year‑over‑year. They will accelerate preferred connections to >75% by year‑end (from 61%), which drives higher revenue per connection but creates mix/timing headwinds to for‑sale revenue (a ~200‑bp timing headwind and Q4 headwinds of roughly 400–600bps; Q3 headwind from timing estimated 200–300bps; 700–800bps shift from residential into mortgages over time). Cost actions include ~7% workforce reductions, $36M of restructuring recorded in Q2 with an additional $23–28M expected in Q3, and $75M of annualized EBITDA savings (aggregate $140M including prior planned reductions). Financial position highlights tied to the outlook: cash & investments $682M, ~$1.2B total liquidity (including a $500M undrawn line), YTD free cash flow $223M (+19% YoY), and $200M repurchased in Q2 ($826M YTD).