Key Stats — Zillow Group, Q4 2025
- Current price: ~$47
- Q4 2025 total revenue: $654M, +18% YoY
- Full-year 2025 revenue: $2.53B, +16% YoY
- Q4 2025 Rentals revenue: $168M, +45% YoY
- Q4 2025 For Sale revenue: $475M, +11% YoY
- Q4 2025 mortgages revenue: $57M, +39% YoY
- Full-year 2025 GAAP net income: $23M (first full-year GAAP profitability)
- Q4 2025 EBITDA: $149M, EBITDA margin: 23%, +260bps YoY
- Full-year 2025 free cash flow: $420M, +36% YoY
- Q1 2026 revenue guidance: $700M–$710M (~18% YoY at midpoint)
- Full-year 2026 revenue guidance: mid-teens growth
- TIKR model price target: ~$243
- Implied upside: ~416%
Zillow Group’s Q4 2025 Earnings Breakdown
Zillow stock (ZG) delivered Q4 total revenue of $654M, up 18% year-over-year and near the top of its outlook range, capping a full year of 16% revenue growth against a housing market that expanded just 3%.
The headline number inside the headline was Rentals: $168M in Q4, up 45% year-over-year, with multifamily revenue up 63%.
Multifamily property count reached 72,000 at year-end, up 44% from 50,000 a year earlier, as property managers expanded their advertising spend on what management describes as the highest-ROI platform in the category.
In For Sale, Q4 revenue of $475M grew 11% year-over-year, roughly 800 basis points ahead of the 3% industry growth rate reported by NAR.
Within For Sale, mortgages revenue of $57M grew 39% in Q4, well above management’s own ~20% guidance, as purchase loan origination volume accelerated to 67% growth year-over-year.
Enhanced markets, where the integrated buyer-agent-loan officer experience comes together, accounted for 44% of connections in Q4, up from 21% a year ago, with the company targeting 75% as an intermediate milestone.
For the full year, Zillow Group reported $23M of GAAP net income, delivering on its profitability target and expanding net income margin 590 basis points year-over-year.
Full-year free cash flow reached $420M, up 36%, and the company repurchased $670M of shares in 2025, part of $1.1B in total capital returned after retiring $419M in convertible debt earlier in the year.
For Q1 2026, management guided revenue of $700M to $710M, implying about 18% growth at the midpoint, with Rentals expected to grow approximately 40% and mortgages approximately 40%.
Full-year 2026 guidance calls for mid-teens revenue growth, continued EBITDA margin expansion, and share-based compensation down more than 10% year-over-year, with elevated legal expenses flagged as a 100 basis point EBITDA headwind for the year.
Zillow Group Stock: What the Financials Show
The Q4 income statement is a margin recovery story: operating losses are narrowing sharply as revenue scales, even as gross margins face mix pressure from faster-growing, higher-cost segments.
Q4 gross margin was 73%, down from about 77% in Q4 2024, reflecting the faster growth of mortgages and rentals relative to the higher-margin residential segment.
Operating income was ($11M) in Q4, with an operating margin of (1.7%), compared to (12.5%) in Q4 2024, an improvement of roughly 11% year-over-year.
That improvement is part of a consistent recovery arc across 2025: operating margins of (1.5%), (1.7%), (0.1%), and (1.7%) across Q1 through Q4, with the company holding operating losses near breakeven throughout the full year.
Fixed costs as a percentage of revenue declined from 44% in 2024 to 41% in 2025, as total fixed costs grew only 2% against 16% revenue growth, according to CFO Jeremy Hofmann on the Q4 earnings call.
Full-year 2025 EBITDA margin expanded 180 basis points year-over-year, and management guided for similar expansion in 2026, notwithstanding the elevated legal expense headwind.
Valuation Model Take
The TIKR model prices Zillow stock at ~$243, implying roughly 416% upside from the current price near $47.
The mid-case assumptions require a 13.5% revenue CAGR through the forecast period and a 46.5% net income margin, both directionally consistent with management’s stated mid-cycle targets of $5B in revenue and 45% EBITDA margins in a normalized housing environment.
This Q4 report strengthens the investment case on execution: the company delivered at the top of its revenue guidance, hit GAAP profitability ahead of many expectations, and is expanding both Rentals and Mortgages at rates that improve the long-term revenue mix.
Even in the low-case scenario, the model implies a stock price near $250 by end of 2030, suggesting the current price of ~$47 is pricing in a level of execution and macro risk that Q4 results do not obviously support.
Zillow stock is executing on what it can control; the question for investors is how much of the thesis requires the housing market to recover from its current 4.1M annual sales pace toward a more normalized 6M.
The central tension: Zillow stock is demonstrating consistent outperformance in a broken housing market, but the path to full model value requires both sustained execution and an industry cycle that has not yet turned.
What Has to Go Right
- Rentals hits the $1B+ revenue target: multifamily properties grew 44% in 2025 to 72,000, against an addressable market of 140,000 buildings, with 2026 guidance of ~30% Rentals revenue growth
- Enhanced markets scale toward 75% of connections: at 44% in Q4 2025, up from 21% a year ago, with each percentage point adding mortgage attach volume and transaction conversion lift
- Zillow Home Loans becomes a consequential purchase lender: purchase originations grew 53% in 2025, Q4 volume grew 67%, and management guided ~40% mortgage revenue growth in Q1 2026
- GAAP profitability expands: full-year 2025 net income of $23M with 590bps of margin expansion, with share-based comp expected down 10%+ again in 2026 and net income projected to grow faster than both revenue and EBITDA
What Could Still Go Wrong
- Existing home sales stay flat at 4.1M: management explicitly modeled 2026 with no housing market recovery; the 45% EBITDA mid-cycle target requires a return to ~6M homes sold annually
- Legal expenses run longer and deeper than guided: Q1 2026 carries a 200bps EBITDA margin headwind, including an FTC matter on an accelerated timeline targeting a summer 2026 trial
- Gross margin compression continues: Q4 2025 gross margin of 73% is down roughly 4 percentage points from Q4 2024, as faster-growing, higher-cost segments pull the blended margin lower
- Enhanced market rollout pace disappoints: management acknowledged that loan officer ramp time and agent trust-building constrain expansion speed, not capital, making the 75% connection target timeline uncertain
Should You Invest in Zillow Group, Inc.?
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