Zillow Group Approaching Key Technical Levels: Is It Time to Buy?

Zillow Group (ZG) is demonstrating a significant turnaround, recovering from a substantial decline rooted in the failed Zillow Offers iBuying program, which incurred a $422 million loss in Q3 2021. The stock has gained nearly 20% in the past three months, supported by bullish technical signals like a Golden Cross. Fundamentally, Zillow reported Q2 2025 revenue of $655 million, a 15% year-over-year increase and its highest since Q2 2021, largely driven by a 36% surge in rental revenue following its strategic partnership with Redfin. While Q2 EPS of 40 cents missed estimates, analysts largely attributed this to increased investments, with ten firms raising price targets, indicating a consensus upside of 7% from current levels.

Analysis

Zillow Group (ZG) is exhibiting a compelling turnaround narrative, underpinned by both fundamental improvements and bullish technical indicators. The company is recovering from the late 2021 collapse of its iBuying program, Zillow Offers, which culminated in a $422 million segment loss in Q3 2021. Recent performance shows significant momentum, with the stock gaining nearly 20% over the last three months. This rally is supported by a 'Golden Cross' technical formation, a signal that historically preceded an 80% price appreciation for the stock. Fundamentally, Zillow's strategic pivot is yielding results, as seen in its Q2 2025 earnings. The company reported revenue of $655 million, a 15% year-over-year increase that beat expectations and marked its highest revenue figure since Q2 2021. This growth was primarily driven by a 36% YoY surge in rental revenue to $159 million, a direct benefit from its new partnership with Redfin. While earnings per share of 40 cents missed the 44-cent estimate, the market appears to have discounted this miss, attributing it to strategic investments in marketing and partnerships. This sentiment is echoed by Wall Street, where ten research firms raised their price targets post-earnings, establishing a new consensus estimate of $85.62, which implies a 7% upside from current levels.

Key Decisions for Investors

• Given the strong revenue growth fueled by the successful Redfin partnership and bullish technical momentum from the Golden Cross, investors with a higher risk tolerance could view the current uptrend as a sustainable recovery and consider initiating or adding to positions.
• Investors should closely monitor future earnings reports for margin improvement, specifically to validate that the increased costs of revenue and marketing investments, which caused the Q2 EPS miss, are temporary and will translate into sustainable profitability.
• While the recovery story is positive, the consensus analyst price target suggests only a modest 7% upside, indicating that investors should weigh the potential for further gains against the risk that much of the good news is already reflected in the current price.