Zillow's Real Estate Recovery Thesis Gets Its First Clear Test
Zillow Group (Z) reports second-quarter 2026 earnings after the close on August 5, with the stock trading at $36.28 ahead of the release. The central question: can the real estate technology platform sustain its dramatic earnings acceleration after posting a massive surprise last quarter? With analysts expecting $0.10 per share—representing 900% year-over-year growth—and the stock down nearly 30% from its 200-day moving average, this report will test whether Zillow's turnaround momentum can overcome a challenging technical backdrop.
Part 1: Earnings Preview
Zillow Group operates the leading real estate and rental marketplace in the United States, connecting buyers, sellers, renters, and real estate professionals through its digital platforms. The company generates revenue primarily through its Premier Agent advertising program, rentals marketplace, and mortgage origination services.
Zillow reports Q2 2026 earnings after market close on August 5, 2026. Analysts expect earnings of $0.10 per share on revenue of approximately $757.82 million. The company most recently reported Q1 2026 earnings of $0.53 per share, which crushed estimates of $0.39 and marked a significant acceleration in profitability. Compared to the same quarter last year (Q2 2025), when Zillow earned just $0.01 per share, the consensus estimate implies 900% year-over-year growth—a dramatic turnaround that reflects the company's improving operational efficiency and market position.
Three key themes define this earnings story:
Housing Market Stabilization: After years of volatility driven by interest rate fluctuations, the housing market is showing signs of stabilization. Investors will scrutinize whether transaction volumes and engagement metrics on Zillow's platform are improving, which would validate the company's revenue growth trajectory and support continued margin expansion.
Premier Agent Monetization: Zillow's core advertising business faces ongoing questions about pricing power and agent retention in a competitive landscape. The company's ability to grow Premier Agent revenue while maintaining or expanding take rates will signal whether its marketplace dominance translates to sustainable pricing leverage.
Path to Profitability: After posting $0.53 in Q1—well above the $0.10 expected for Q2—investors are watching whether Zillow can maintain profitability momentum or if Q1 represented a peak. The sharp sequential decline in estimates suggests analysts see Q1 as an outlier, making any upside surprise particularly significant for validating the earnings power of the business model.
Analyst commentary ahead of the release reflects cautious optimism. With 15 strong buy ratings and an average price target of $60.31 (66% above current levels), the Street sees substantial upside—but the wide range of estimates ($0.06 to $0.12 for Q2) reveals uncertainty about near-term earnings power. The consensus has improved over the past month, with one additional strong buy rating added, suggesting growing confidence in Zillow's trajectory despite the stock's recent weakness.
Part 2: Historical Earnings Performance
Zillow has demonstrated increasingly consistent execution over the past four quarters, with a notable pattern of significant earnings surprises. In Q1 2026 (March), the company delivered $0.20 per share against estimates of $0.11, representing an 81.82% beat—the most recent in a string of volatile results. The prior quarter (Q4 2025, December) saw earnings of $0.01 versus expectations of -$0.01, a 200% surprise that marked a return to profitability.
The pattern over the past year shows extreme variability: Q2 2025 (June) produced a 75% miss with $0.01 versus $0.04 expected, followed by Q3 2025 (September) delivering $0.06 against $0.05 estimates for a 20% beat. This inconsistency reflects Zillow's transition period as the company restructures its business model and works toward sustainable profitability.
The trend has clearly inflected positive in recent quarters. After the significant Q2 2025 miss, Zillow has posted three consecutive beats, with the magnitude of surprises accelerating dramatically—from 20% to 200% to 81.82%. This improving trajectory suggests the company may have turned a corner operationally, though the wide dispersion in quarterly results indicates earnings remain difficult to forecast with precision. Investors will watch whether Q2 2026 continues this positive momentum or represents a normalization after Q1's exceptional performance.
| Quarter | EPS Estimate | EPS Actual | Surprise % | Beat/Miss |
|---|---|---|---|---|
| Jun 2025 | $0.04 | $0.01 | -75.00% | Miss |
| Sep 2025 | $0.05 | $0.06 | +20.00% | Beat |
| Dec 2025 | $-0.01 | $0.01 | +200.00% | Beat |
| Mar 2026 | $0.11 | $0.20 | +81.82% | Beat |
Note: These figures reflect diluted GAAP earnings per share, reported before non-recurring items, and may differ from the non-GAAP figures used by some sources.
Part 2.1: Price Behavior Around Earnings
Zillow reports after market close, meaning Day 0 reflects anticipatory trading before results are known, while Day +1 captures the market's first full reaction to the actual numbers.
| Earnings Date | Day 0 Move | Day 0 Range | Day +1 Move | Day +1 Range |
|---|---|---|---|---|
| 2026-05-06 | +$0.99 (+2.27%) | $1.39 (3.19%) | -$0.85 (-1.91%) | $2.98 (6.69%) |
| 2026-02-10 | +$0.43 (+0.79%) | $1.93 (3.56%) | -$9.05 (-16.54%) | $8.98 (16.41%) |
| 2025-10-30 | +$0.20 (+0.28%) | $2.46 (3.45%) | +$3.26 (+4.55%) | $5.58 (7.78%) |
| 2025-08-06 | +$2.69 (+3.25%) | $3.56 (4.32%) | -$0.55 (-0.64%) | $5.70 (6.70%) |
| 2025-05-07 | +$0.69 (+1.03%) | $1.62 (2.41%) | +$0.02 (+0.03%) | $4.75 (7.01%) |
| 2025-02-11 | -$1.65 (-1.88%) | $3.59 (4.08%) | -$8.11 (-9.40%) | $8.56 (9.92%) |
| 2024-11-06 | -$4.12 (-6.56%) | $5.26 (8.38%) | +$13.95 (+23.77%) | $6.11 (10.42%) |
| 2024-08-07 | -$0.64 (-1.51%) | $2.13 (5.02%) | +$7.63 (+18.27%) | $3.66 (8.75%) |
| Avg Abs Move | 2.20% | 4.30% | 9.39% | 9.21% |
Historical price action around Zillow earnings shows significant volatility, with an average absolute Day +1 move of 9.39%—substantially larger than the Day 0 move of 2.20%. This pattern is consistent with after-hours reporting, where the real reaction materializes the following trading session once investors digest the results and management commentary.
The most dramatic recent moves came in November 2024, when the stock surged 23.77% the day after earnings, and February 2026, when it plunged 16.54% following results. The May 2026 report (most recent) produced a relatively muted 1.91% decline on Day +1 despite the strong earnings beat, suggesting the market may have already priced in positive expectations or found guidance disappointing.
The average Day +1 range of 9.21% indicates substantial intraday volatility as well, with investors frequently reassessing positions as they parse the details. Given this history, investors should prepare for significant price movement following the August 5 report, with moves in the high single digits to low double digits being typical for Zillow earnings events.
Part 2.2: Options Market Expected Move
| Metric | Value |
|---|---|
| Expiration Date | 08/21/26 (DTE 17) |
| Expected Move | $4.77 (13.14%) |
| Expected Range | $31.51 to $41.05 |
| Implied Volatility | 84.28% |
The options market is pricing a 13.14% expected move through the August 21 expiration (17 days out), implying a range of $31.51 to $41.05. This is notably higher than Zillow's average historical Day +1 move of 9.39%, suggesting options traders are pricing in above-average volatility for this particular release—possibly reflecting uncertainty around whether Q1's strong results can be sustained or concerns about guidance in a still-uncertain housing market.
Part 3: What Analysts Are Saying
Analysts maintain a bullish stance on Zillow with an average rating of 4.00 (Buy), supported by 15 strong buy ratings, 1 moderate buy, and 15 holds—with zero sell ratings across the coverage universe of 31 analysts. The average price target of $60.31 implies 66% upside from the current price of $36.28, with the high estimate of $110.00 suggesting some analysts see potential for the stock to triple if the company fully executes on its opportunity.
Sentiment has improved over the past month, with the average recommendation ticking up from 3.94 to 4.00 as one analyst upgraded to strong buy. This positive shift comes despite the stock's significant decline from higher levels, suggesting analysts view the current valuation as increasingly attractive relative to Zillow's improving fundamentals and long-term earnings power.
The wide range of price targets—from a low of $34.00 (just 6% below current levels) to the $110.00 high—reflects divergent views on execution risk and the housing market outlook. Bulls see Zillow's dominant market position and operating leverage driving substantial earnings growth, while more cautious analysts likely worry about competitive pressures and macroeconomic headwinds. The concentration of strong buy ratings indicates the analyst community is increasingly confident in the turnaround story, viewing current levels as an opportunity rather than a value trap.
Part 4: Technical Picture
Zillow's technical setup heading into earnings is mixed, with the stock showing recent momentum improvement but remaining well below longer-term trend levels. The Barchart Technical Opinion currently reads 56% Sell, representing a significant improvement from 88% Sell a month ago and 72% Sell last week—indicating weakening bearish pressure as the stock has stabilized.
Timeframe Analysis:
- Short-term (50% Sell): Moderate sell signal suggests near-term momentum remains tentative despite recent gains
- Medium-term (50% Sell): Neutral-to-negative reading indicates the intermediate trend has not yet confirmed a reversal
- Long-term (100% Sell): Strong sell signal reflects significant weakness in the longer-term trend structure
Trend Characteristics: The trend is characterized by Average strength in the Weakest direction, suggesting Zillow remains in a downtrend but with diminishing conviction—a setup that could resolve either way depending on earnings results.
The moving average structure tells a story of recent recovery within a broader downtrend. The stock trades above its 5-day ($34.63), 10-day ($33.05), 20-day ($32.96), and 50-day ($33.25) moving averages, indicating short-term momentum has turned positive. However, the price remains below both the 100-day ($37.80) and 200-day ($51.27) moving averages, with the 200-day nearly 30% above current levels—a significant technical overhang.
| Period | Value | Period | Value |
|---|---|---|---|
| 5-Day MA | $34.63 | 50-Day MA | $33.25 |
| 10-Day MA | $33.05 | 100-Day MA | $37.80 |
| 20-Day MA | $32.96 | 200-Day MA | $51.27 |
Key resistance sits at the 100-day moving average of $37.80, just 4% above current levels, which could cap upside if earnings disappoint. The clustering of short-term moving averages in the $33-$34 range provides nearby support. The overall technical setup is cautiously constructive for earnings: recent momentum improvement and the weakening sell signal suggest the stock has stabilized after its decline, but the distance from longer-term averages means a strong earnings beat and guidance would be needed to trigger a sustained breakout. Conversely, any disappointment could quickly reverse recent gains and test support in the low $30s.
