Z -1.99% NVDA -0.89% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
In the past 12 months, Zillow's (NASDAQ: Z) share price has collapsed by more than 60% as of this writing. The reasons for the crash are multifaceted. The path to recovery looks increasingly difficult. The stock is cheap, but for a reason, and I don't see a turnaround anytime soon.
The second-quarter earnings weren't bad at all. Revenue grew 18% year over year, and the company's mortgage division expanded an impressive 75% to $84 million. The problem is that Zillow still posted a GAAP loss of $4 million in the quarter.
Missed AI's "Act 1"? Act 2 Could Be 14x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
Plus, even with the decline in share price, the stock is still trading at 124 times trailing earnings. The potential recovery isn't getting any easier, as Zillow contends with macroeconomic factors, including a slowing housing market and rising mortgage rates. It's also facing challenges in the form of legal matters and competition. Zillow was cut off from more than 30,000 listings in Chicago recently. The company's competitive edge could crumble if antitrust lawsuits don't go Zillow's way.
Zillow needs to find a way to scale its end-to-end real estate journey for advisors, buyers, and sellers alike. It also needs to find other reliable sources of revenue to help better weather housing market slowdowns.
Between the legal troubles and a weak housing market, I don't foresee any relief for Zillow's investors in the coming years. Sure, the stock is below $28 per share, but it may still be a costly investment. I don't believe it's worth buying right now, not until management can prove there's a clear path to profitability and sustainability.
Before you buy stock in Zillow Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Zillow Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $370,440!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,470,022!*
Now, it's worth noting Stock Advisor's total average return is 955% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of October 7, 2026.
Catie Hogan has no position in any of the stocks mentioned. The Motley Fool recommends Zillow Group. The Motley Fool has a disclosure policy.
Zillow Costs Less Than $28 a Share. Here's Why I'd Still Not Buy One. was originally published by The Motley Fool
