Online real estate marketplace Zillow (NASDAQ: ZG) met Wall Street’s revenue expectations in Q1 CY2026, with sales up 18.4% year on year to $708 million. Its GAAP profit of $0.19 per share was significantly above analysts’ consensus estimates.

Is now the time to buy Zillow? Find out by accessing our full research report, it’s free.

Company Overview

Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ: ZG) is the leading U.S. online real estate marketplace.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Zillow’s demand was weak and its revenue declined by 4.7% per year. This was below our standards and is a sign of poor business quality.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Zillow’s annualized revenue growth of 15.9% over the last two years is above its five-year trend, which is encouraging.

This quarter, Zillow’s year-on-year revenue growth was 18.4%, and its $708 million of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 14% over the next 12 months, a slight deceleration versus the last two years. Despite the slowdown, this projection is above average for the sector and suggests the market is forecasting some success for its newer products and services.

ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all.

Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE.

Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Zillow’s operating margin has been trending up over the last 12 months, but it still averaged negative 3% over the last two years. This is due to its large expense base and inefficient cost structure.

This quarter, Zillow generated an operating margin profit margin of 5.1%, up 6.6 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Zillow’s EPS grew at 9% compounded annual growth rate over the last five years. This performance was better than its 4.7% annualized revenue declines but doesn’t tell us much about its business quality because its operating margin didn’t improve.

In Q1, Zillow reported EPS of $0.19, up from $0.03 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Zillow’s full-year EPS of $0.25 to grow 229%.

Key Takeaways from Zillow’s Q1 Results

Revenue was in line but all-important Residential revenue missed. On the other hand, it was good to see Zillow beat analysts’ EPS expectations this quarter. Zooming out, we think this was a mixed print. The market seemed to be hoping for more, and the stock traded down 5% to $42.60 immediately following the results.

So should you invest in Zillow right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).