What happened?
Shares of online real estate marketplace Zillow (NASDAQ: ZG) fell 8.5% in the afternoon session after the company reported third-quarter 2026 financial results that included a net loss of $158 million and lower residential revenue amid elevated mortgage rates. According to the company's release, the loss came to 70 cents a share, below the 15-cent profit analysts expected. A legal settlement sat inside that loss, and adjusted profit was still positive. Revenue was $724 million, below the $752.6 million estimate. Residential revenue fell because higher mortgage rates held back home sales. Growth in rentals softened that hit.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Zillow? Access our full analysis report here, it’s free.
What is the market telling us
Zillow’s shares are very volatile and have had 25 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 24 days ago when the stock dropped 3.4% on the news that Wells Fargo lowered its price target on the company's stock to $31. According to Streetinsider, analyst Alec Brondolo cut the target to $31 from $35 and kept an Equal Weight rating. He is lowering estimates because of a weaker macro backdrop. He said those estimate cuts are likely already expected, but challenging strategic developments make it hard to call a bottom in the valuation multiple.
Zillow is down 52.6% since the beginning of the year, and at $31.08 per share, it is trading 57.9% below its 52-week high of $73.87 from December 2025. Investors who bought $1,000 worth of Zillow’s shares 5 years ago would now be looking at only $469.67.
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