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Zillow Group (Z) shares fell about 15% in premarket trading after third-quarter earnings and revenue missed estimates and fourth-quarter guidance came in well below expectations.
- Zillow earned 55 cents a share against 59 cents expected, and revenue was $724M against $754M.
- Fourth-quarter revenue guidance of $635M to $665M sits far below the roughly $741M expected.
- GAAP results swung to a $158M net loss from a $10M profit a year earlier.
Lead
Zillow Group (NASDAQ: Z, ZG) shares dropped roughly 15% in premarket trading on Thursday, November 5, after the online real estate marketplace missed Wall Street estimates for the third quarter of 2026. Adjusted earnings were 55 cents per share against a consensus of about 59 cents. Revenue was $724M against $754M expected. The selloff began in extended trading after the report on Wednesday and carried into the premarket session.What Did Zillow Report for Q3 2026?
Zillow reported revenue of $724M, up 7.1% from a year earlier, but about 4% short of the consensus figure. Adjusted earnings per share of 55 cents also fell short. The growth rate is positive, but it was not enough to meet expectations that had been set for a company still leaning on housing-market recovery.
On a GAAP basis, the company posted a net loss of $158M, or 70 cents per share. In the same quarter last year it reported net income of $10M. The gap between adjusted and GAAP results reflects costs excluded from the adjusted measure, and the swing to a loss added to the negative reaction.
Why Did Zillow Shares Fall So Sharply?
Shares fell because the quarter showed weakness in the core residential business and the guidance showed no near-term improvement. Higher mortgage rates have kept many buyers and sellers out of the market. That reduces the transaction activity that drives demand for Zillow's advertising and lead-generation products. Declining website traffic added to the pressure.
The market reaction was larger than the size of the quarterly miss would suggest. Investors had priced in a gradual improvement in housing activity. The results and outlook pushed that timeline out.
What Does the Weak Guidance Mean for the Fourth Quarter?
The guidance implies revenue well below what the market expected. Zillow projected fourth-quarter revenue of $635M to $665M. The consensus estimate was about $741M. Even the top of the range sits roughly $76M below that figure, and the midpoint is about 12% lower.
The range also implies a sequential decline from the $724M reported in the third quarter. That is unusual for a company that has been growing revenue year over year. It points to continued softness in the transaction cycle through the end of the year rather than a one-quarter disruption.
Housing Market Context
Zillow's business is closely tied to the volume of home sales and the share of that activity that flows through its platform. Mortgage affordability remains the main constraint. Elevated borrowing costs have reduced the number of listings and buyers, and that weighs on the advertising spend of real estate agents and partners who pay for access to prospective customers.
The report puts Zillow's strategy of expanding beyond listings into rentals, mortgages and transaction services under closer scrutiny. Those segments are meant to diversify revenue away from agent advertising. Their contribution has not yet offset the cyclical weakness in the core business.
Outlook
Zillow enters the final quarter of 2026 with a double earnings miss, a swing to a GAAP loss, and guidance that points to a sequential revenue decline. The pace of any recovery now depends on mortgage rates and housing transaction volumes. The next test is the fourth-quarter report, which will show whether traffic and agent demand have stabilized.
Mentioned tickers: Z, ZG
