ZG Should I Buy
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Zillow Group Inc (ZG) is not a strong buy at the moment for a beginner investor with a long-term focus. While the company has shown revenue growth, its declining net income, EPS, and gross margin, coupled with insider selling and mixed analyst sentiment, suggest caution. The technical indicators and options data do not provide a clear bullish signal, and there are no strong positive catalysts to justify immediate action.
The stock's MACD is positive and expanding, indicating some bullish momentum. However, RSI is neutral at 48.905, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading near its pivot level of 44.566, with resistance at 46.609 and support at 42.522, suggesting limited upside in the short term.
The company reported an 18.05% YoY revenue increase in Q4 2025, showing operational progress despite a challenging housing market. Analysts acknowledge the company's initiatives to drive growth and improve margins over time.
Net income dropped by 105.77% YoY, EPS fell by 104.55%, and gross margin declined by 4.00% YoY. Insider selling has surged by 6670.06% over the past month, and there are no recent news or event-driven catalysts. Legal expenses are weighing on EBITDA, and the housing market remains challenging.
In Q4 2025, revenue increased by 18.05% YoY to $654 million. However, net income dropped to $3 million (-105.77% YoY), EPS fell to 0.01 (-104.55% YoY), and gross margin decreased to 72.78 (-4.00% YoY).
Analysts have mixed views. While some maintain a Buy rating with lowered price targets (e.g., Citi: $78, DA Davidson: $75), others remain Neutral due to legal expenses and a challenging housing market (e.g., Susquehanna: $50, Goldman Sachs: $62). The average sentiment is cautious optimism, but near-term headwinds persist.
