Abstract
Zillow Group will report its quarter ending December results on February 10, 2026 Post Market. This preview synthesizes the latest financial forecasts and recent institutional commentary to frame expectations for revenue, profitability, margins, and adjusted EPS, with a focus on the company’s core businesses and the outlook for near-term catalysts.
Market Forecast
Market consensus for the current quarter anticipates revenue of $650.35 million, an increase of 19.27% year over year, with EPS of $0.40 and EBIT at a loss of $20.24 million; year-over-year growth expectations imply improving earnings efficiency despite forecast operating loss. Given prior-period trends, investors are watching for a gross profit margin profile close to the recent 72.63%, a net profit margin near the recent baseline, and improving adjusted EPS versus the year-ago quarter.
The company’s main business mix is expected to remain anchored by Residential, Rentals, and Mortgages, with Residential continuing to represent the bulk of revenue and leading the outlook on product engagement and partner monetization. The most promising growth segment is Rentals, supported by ongoing demand for high-intent renter traffic and product enhancements; Rentals recently generated $174.00 million and continues to post solid year-over-year growth momentum.
Last Quarter Review
In the previous quarter, Zillow Group delivered revenue of $676.00 million, with a gross profit margin of 72.63%, GAAP net profit attributable to shareholders of $10.00 million, a net profit margin of 1.48%, and adjusted EPS of $0.44, representing year-over-year growth of 25.71%.
A key business highlight was improved operating discipline that outpaced revenue growth, contributing to better-than-expected adjusted EPS and a narrow GAAP profit, while retaining robust gross margin performance. Main business highlights included Residential revenue of $435.00 million, Rentals revenue of $174.00 million, and Mortgages revenue of $53.00 million, underscoring the continued importance of Residential to overall monetization and the acceleration potential in Rentals.
Current Quarter Outlook (with major analytical insights)
Main business: Residential
Residential remains the core revenue driver and principal determinant of this quarter’s stock reaction. With the previous quarter’s Residential revenue of $435.00 million, the segment’s performance this quarter will reflect how partner ad budgets and lead conversion respond to seasonal listing dynamics and incremental product enhancements. If buyer engagement holds up despite typical winter softness, Residential revenue elasticity to traffic could support stable sequential performance even as lead pricing frameworks adjust to inventory conditions.
The forecast EPS of $0.40 indicates management and consensus expect efficiency gains to partly offset an estimated EBIT loss of $20.24 million; within this framework, Residential contribution margin trends will be critical for validating durability of high-60s to low-70s gross margin at the consolidated level. Investors will also parse signals on agent retention and spend concentration among top teams and brokerages, because a higher share with top performers can raise near-term monetization while bringing sensitivity to transaction volumes. A constructive outcome would show healthy lead-to-transaction conversion, resilience of premium ad packages, and evidence that tooling upgrades are improving ROI for partners.
Most promising business: Rentals
Rentals continues to show the most consistent growth setup into this print. The segment recently generated $174.00 million and benefits from a large, recurring-intent user base, less cyclical sensitivity than home purchases, and steady demand for placements and subscription solutions. The outlook for the quarter embeds continued product innovation around listing quality, renter lead routing, and landlord tools, which can lift monetization per visitor without meaningfully raising user friction.
Key variables include the pace of new property listings, landlord adoption of premium placements, and improvements in renter lead quality. The broader rental market’s relatively stable demand profile supports sustained traffic, and pricing discipline on advertising products can translate to incremental revenue capture. If visibility into 2026 renter traffic trends improves, investors may ascribe a higher multiple to the Rentals revenue stream given its comparatively predictable growth and margin potential. The risk to watch is competitive intensity from alternative rental marketplaces, which could compress ad yields; success will hinge on differentiating user experience and inventory liquidity.
Factors most impacting the stock this quarter
The first catalyst is the revenue print versus the $650.35 million consensus and the degree to which consolidated gross margin stays near the recent 72.63%. A result that shows revenue growth close to the forecast 19.27% year over year with resilient gross margin would support the EPS trajectory and alleviate concerns about the forecast EBIT loss. Conversely, a revenue shortfall or material gross margin compression would likely weigh on valuation given sensitivity to top-line momentum in a mixed macro for housing transactions.
The second catalyst is adjusted EPS progression relative to the prior quarter’s $0.44 and management’s commentary on operating expense cadence. If expense leverage is evident despite investments in product and data infrastructure, the EPS outlook could strengthen even if EBIT is modestly negative, reinforcing the case for margin expansion later in the year. The third factor is segment color: any indication that Rentals maintains double-digit growth and that Residential engagement/lead quality metrics are improving would likely be viewed positively; updates on Mortgages cross-sell attach rates and capture of purchase/refi opportunities will also influence sentiment. Taken together, investors will focus on evidence that high-quality traffic and partner ROI improvements can sustain revenue growth while protecting margin structure.
Analyst Opinions
Across recent institutional previews and commentary, the majority view is moderately bullish, citing durable audience scale, improving ad ROI signals for partners, and the recurring nature of Rentals monetization as supports for near-term revenue growth and earnings quality. Analysts expecting upside emphasize that the $650.35 million revenue forecast and $0.40 EPS set a bar that appears achievable if Residential monetization remains stable and Rentals continues its growth trajectory, while the projected EBIT loss of $20.24 million is seen as manageable within a high-margin model.
Commentary from well-known sell-side desks points to a constructive stance on engagement and advertiser spend resilience into early 2026, highlighting the potential for Rentals to outgrow consolidated revenue and for Residential to benefit from ongoing product improvements that enhance lead quality. The bullish camp also notes that last quarter’s adjusted EPS of $0.44 and GAAP net profit of $10.00 million demonstrated cost discipline and operational control, suggesting capacity to navigate a winter demand environment. In aggregate, the prevailing opinion anticipates an in-line to modestly better revenue outcome with stable margin signals, which, if confirmed, could support a positive stock reaction post release.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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