Zillow (ZG) Stock: Why It Fell After Hours on a Weak Outlook

Quick answer

Zillow's Class A shares (ZG) traded at $30.36 at 4:23pm ET on Nov 4, 2026, down 11.9% from a $34.45 close, after third-quarter revenue missed the company's own guide and its fourth-quarter outlook came in far below what its old full-year range implied. The Class C shares (Z) were $29.92 at 4:26pm, down 11.7% from $33.90. Revenue rose 7% to $724 million, short of the $745 million to $760 million Zillow guided in August and a consensus of about $754 million, and adjusted earnings of $0.55 a share missed the roughly $0.59 expected. The fourth-quarter revenue guide of $635 million to $665 million is about 12% below the roughly $736 million that the August outlook implied, and Zillow cut its full-year adjusted EBITDA guide by about $73 million at the midpoint. Its letter blamed "the recent rapid rise in mortgage rates." Both share classes had risen about 10% in the regular session as housing stocks rallied after the midterm elections, and ZG touched $26.65 within minutes of the 4:05pm release before recovering part of the drop.

Our view: Bearish through February 10, 2027, around when Zillow is expected to report the fourth quarter and set its 2027 tone. The case for the stock: Rentals revenue grew 26% and Mortgages revenue 32%, with purchase loan volume up 55% while the industry shrank 4%; the third-quarter adjusted EBITDA margin rose to 25% from 24%; and the shares trade at about 12 times forward earnings, more than 50% below their 52-week high. The case against: the fourth-quarter guide calls for For Sale revenue, about two thirds of the company, to fall 9% to 15%, and the adjusted EBITDA margin to drop to 18%; Zillow now expects industry purchase originations to fall 10% to 15%, a sharp turn from the low- to mid-single-digit decline it assumed in August; and the shift of agent connections to its Preferred program will keep pulling Residential revenue into later periods through the first half of 2027. We think the case against carries more weight into February. The stock gave back the day's election rally and a little more, while the full-year profit guide fell about 10% and the damage sits in the quarters still ahead, where 2027 consensus revenue of about $3.27 billion still assumes double-digit growth. We would move off Bearish if ZG closes back above $31.35, its close before the rally, if the MBA 30-year mortgage rate falls below 7% from the 7.3% reported on Nov 4, or if fourth-quarter revenue tops the $665 million high end of the guide. This is a view on direction over that window, not a recommendation to trade the stock.

Zillow Class A (ZG) daily closing price from Sep 21 to Nov 4, 2026, with the Sep 30 low close, the Nov 4 close before results and the after-hours drop marked

Key takeaways

Zillow's Class A shares (ZG) traded at $30.36 at 4:23pm ET on Nov 4, 2026, down 11.9% from a $34.45 close, after third-quarter revenue of $724 million missed both the company's $745 million to $760 million guide and a consensus of about $754 million. The Class C shares (Z) were $29.92 at 4:26pm, down 11.7%.
The fourth-quarter guide of $635 million to $665 million sits about 12% below the roughly $736 million that the August full-year outlook implied, and Zillow cut its full-year adjusted EBITDA guide to $655 million to $690 million from $730 million to $760 million.
Zillow blamed a fast rise in mortgage rates, which cut home sales and loan conversions. It now expects industry purchase mortgage originations to fall 10% to 15% in the fourth quarter, and For Sale revenue to fall 9% to 15%.
Rentals revenue rose 26% and Mortgages revenue 32%, but Residential revenue, the agent business, fell 4%. Earlier in the day both share classes rose about 10% as housing stocks rallied after the midterm elections.
Our view is Bearish through February 10, 2027: the outlook cut lands on the fourth quarter and the first half of 2027, the agent business is shrinking, and 2027 estimates have not yet absorbed the new run rate.

Table of contents

Nov 4, 2026: an election rally, then a guide cut
The numbers
The bull case
The risks
What comes next

Nov 4, 2026: an election rally, then a guide cut

ZG closed Nov 3 at $31.35 and traded between $31.57 and $32.81 before the open on Nov 4, the day after Democrats won control of Congress. Housing stocks rallied on hopes for new affordability measures, and the 10-year Treasury yield slipped to about 4.89%, Yahoo Finance reported. ZG opened at $33.32, made its session low of $33.28 in the first minute and reached $34.76 at 11:49am. It closed at $34.45, up 9.9%, on about 2.9 million shares. Z closed at $33.90, up 9.4%. The rally was sector wide: Rocket rose 8.7%, Compass 7.7%, Opendoor 13.8%, CoStar 4.0% and the iShares U.S. Home Construction fund 7.6%, against 1.0% for the Nasdaq 100 fund QQQ.

The results came out at 4:05pm ET. ZG traded at $30.92 in the first minute, fell to $26.65 at 4:08pm, below its 52-week low of $27.25, and climbed back to $30.36 by 4:23pm. Z touched $26.38 at 4:08pm and was $29.92 at 4:26pm. Rocket, Compass and Opendoor were within 0.5% of their closes at about the same time, so the after-hours selling was specific to Zillow.

What moved the stock:

Revenue missed the company's own range. The $724 million total fell $21 million short of the bottom of the August guide. For Sale revenue was flat at $489 million, against a guide of 5% to 7% growth, and Residential revenue fell 4% to $419 million, against a flat guide.
Mortgages grew less than planned. Mortgages revenue rose 32% to $70 million, against a guide of more than 50%. Purchase loan volume rose 55% to $2.0 billion, but the letter said "the rapid rise in mortgage rates during the quarter caused lower conversion."
The fourth quarter barely grows. The $635 million to $665 million guide compares with $654 million a year earlier. Subtracting the first nine months from the old full-year midpoint of $2.94 billion, the August guide implied about $736 million.
Profit guidance fell. Full-year adjusted EBITDA is now guided to $655 million to $690 million, a 24% margin, from $730 million to $760 million and a 26% margin. The fourth-quarter guide of $100 million to $135 million implies an 18% margin.

At the regular close, before the drop, RSI(14) stood at 59, the shares sat 8.3% above their 50-day average and 10.9% below their 200-day average, volume ran 2.4 times its 20-day average, and the stock was 53.9% below its 52-week high of $74.80. The rest of the session's movers are in today's biggest stock moves.

Bar chart of Zillow quarterly revenue in millions: Q4 2025 actual 654, Q3 2026 old guide midpoint 752.5, Q3 2026 consensus 754.3, Q3 2026 actual 724, Q4 2026 implied by the old guide 736, Q4 2026 new guide midpoint 650

The numbers

Measure	Q3 2026	Q3 2025	Change
Total revenue	$724 million	$676 million	+7%
Residential	$419 million	$435 million	-4%
Mortgages	$70 million	$53 million	+32%
Rentals	$220 million	$174 million	+26%
Adjusted EBITDA	$182 million	$165 million	+10%
Net income (loss)	-$158 million	$10 million	n/a

Adjusted EBITDA landed at the low end of the $180 million to $200 million guide. The net loss came from a $165 million settlement, net of expected insurance, of the securities class action over Zillow Offers, its former home-flipping business. Zillow also excluded $8 million of costs from the antitrust case brought by the FTC and state attorneys general, and $32 million of impairment and restructuring costs. Average monthly unique users fell 3% to 215 million and visits fell 5% to 2.3 billion. Cash and investments ended the quarter at $707 million. The letter did not mention the listing-access dispute with Compass. Our guide on how to read an earnings release covers how to separate charges like the settlement from the run rate.

The bull case

The parts of Zillow that do not depend on home sales are still growing fast. Rentals revenue rose 26%, multifamily revenue 35%, and the number of apartment properties advertising on Zillow reached a record 81,000, up 17%. Zillow still expects Rentals to grow about 30% for the year. Purchase loan volume grew 55% while the industry shrank, so the mortgage push is gaining share even if rates delayed the revenue. Zillow says 77% of visitors in the real estate category came to its sites, and it expects all buyer connections to run through Preferred partners in the first half of 2027, when the drag from that transition should start to fade. At about 12 times forward earnings and with $707 million of cash, the stock already prices in a lot of bad news, and a policy push on housing from the new Congress would help. Our page on short interest and squeezes is relevant too: about 11% of the ZG float was sold short before the report.

The risks

The core business is shrinking with the housing market. Zillow expects For Sale revenue to fall 9% to 15% in the fourth quarter, and part of that is timing: the shift to Preferred and the way Zillow Home Loans books revenue create a 900 to 1,000 basis point headwind to Residential. That headwind is guided to continue through the first half of 2027 and only moderate in the second half, so the next two or three reports carry the same drag. The MBA 30-year mortgage rate stood at 7.3% on Nov 4, and Zillow's own September data showed newly pending home sales down 8.5%, Investing.com reported.

The outlook also moved further than the stock. The full-year EBITDA guide fell about 10%, the fourth-quarter margin is guided to 18% from 25% in the third quarter, and estimates for 2027 were set against the old trajectory. Our guide to earnings estimate revisions explains why the weeks after a cut like this often bring more selling as analysts lower their numbers, and our explainer on guidance changes covers why a weak next quarter usually matters more than the quarter just reported. The FTC antitrust case is still open, and the letter lists possible remedies that include a permanent injunction and a divestiture of assets.

What comes next

Zillow is expected to report the fourth quarter around February 10, 2027, a year after its last fourth-quarter report. Before then, watch analyst estimate cuts for 2027, weekly mortgage rate data, and whether ZG holds above the $26.65 after-hours low or recovers to the $31.35 close it held before the election rally. Our page on post-earnings announcement drift covers why stocks that gap down on a guidance cut often keep drifting the same way.

Frequently asked questions

Why did Zillow stock fall on Nov 4, 2026?

Zillow's ZG shares fell 11.9% to $30.36 at 4:23pm ET after third-quarter results. Revenue rose 7% to $724 million, short of the $745 million to $760 million Zillow guided in August and a consensus of about $754 million, and the fourth-quarter revenue guide of $635 million to $665 million implies roughly flat sales from a year earlier. Zillow blamed higher mortgage rates.

Why did Zillow stock rise 10% before its earnings?

Housing stocks rallied on Nov 4 after Democrats won control of Congress in the midterm elections, on hopes for new housing affordability measures, and the 10-year Treasury yield fell to about 4.89%. Rocket rose 8.7%, Compass 7.7%, Opendoor 13.8% and the iShares homebuilder fund 7.6%. ZG closed up 9.9% and Z up 9.4% before the report.

What is Zillow's guidance for the fourth quarter of 2026?

Zillow expects fourth-quarter revenue of $635 million to $665 million and adjusted EBITDA of $100 million to $135 million, an 18% margin at the midpoint. It expects For Sale and Residential revenue to fall about 9% to 15% from a year earlier, Mortgages revenue to dip by a low single digit at the midpoint and Rentals to grow at about the third quarter's pace.

Why did Zillow report a net loss?

Zillow lost $158 million in the third quarter, or $0.70 a share, mainly because it booked a $165 million settlement, net of expected insurance, of the securities class action over its former Zillow Offers home-flipping business. Excluding that and other items, adjusted net income was $124 million, or $0.55 a share, against $0.44 a year earlier.

What is Dombey's view on Zillow stock?

Bearish through February 10, 2027, around when Zillow is expected to report the fourth quarter. This is a view on direction over that window, not a recommendation to trade the stock.

What would change the view on Zillow?

We would move off Bearish if ZG closes back above $31.35, its close before the election rally, if the MBA 30-year mortgage rate falls below 7% from 7.3%, or if fourth-quarter revenue comes in above the $665 million top of the guide.

Sources

Article details

By James Whitfield, Head of Equity Research, Dombey Capital

Published November 4, 2026 · 7 min read · Event-Driven Investing