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Just For You Zillow's 3-Day Rally Could Mean More Than You ThinkReported by Sam Quirke. Originally Published: 2/21/2026. 
Key Points - Zillow has fallen back to 2014 price levels after a brutal multi-year slide, erasing nearly two years of gains.
- The stock has just logged three consecutive up days for the first time in weeks, while the RSI is at one of its lowest levels in more than a decade.
- Revenue growth, margin expansion, and a fresh Overweight rating with more than 50% upside suggest pessimism may be overdone.
- Special Report: [Sponsorship-Ad-6-Format3]
After months of relentless selling, shares of Zillow Group Inc (NASDAQ: ZG) have quietly done something they hadn't managed recently: three straight days of gains. That may not sound dramatic, but in the context of a nearly 50% collapse and extreme bearish sentiment, it's notable. Shares now trade around $45 — roughly where they were in 2014 — with nearly two years of gains wiped out over the past five months alone. A sluggish housing market, driven by elevated mortgage rates, and a disappointing report last week have done the stock no favors. Still, with sentiment near rock-bottom and price action showing early signs of stabilization, could this run of green days be the start of something? The Fundamentals Don't Match the Fear The latest earnings report may have accelerated the decline, but it didn't start it — Zillow shares have been under pressure since September. Still, last week's results were far from disastrous: earnings missed by a few cents, but revenue beat expectations and rose 18% year over year. Adjusted EBITDA also increased year over year and margins expanded, helping the company achieve full-year profitability. The chart might not look great, but this wasn't the report you'd expect from a business in terminal decline. One standout from the quarter was strength in rentals. That segment delivered robust growth, particularly in multifamily, and management expects continued expansion into next year. Rentals are becoming a critical pillar of Zillow's diversification strategy. Mortgage revenue also expanded meaningfully, reinforcing Zillow's evolution into an integrated ecosystem spanning buying, selling, renting and financing. The strategy increasingly focuses on capturing value across the entire moving journey rather than relying solely on listing fees. Investor Worries May Be Overblown Part of the recent plunge reflects anxiety around AI disruption and private listing networks. Many investors fear AI-powered housing portals could undermine Zillow's position — a trend affecting not just Zillow but the wider tech space. But consumer behavior suggests Zillow is likely to remain the default destination for home search for the foreseeable future. Competitors may be spending aggressively to gain share, but so far they've had limited success. Housing at a Cyclical Low That said, Zillow still faces an uphill battle in the near term. The broader U.S. housing market remains near a cyclical trough due to elevated mortgage rates and affordability constraints. Transaction volumes are subdued, creating a challenging backdrop for any real-estate-linked platform. However, cyclical troughs can create opportunities for long-term-minded investors. When transactions normalize and the market recovers, Zillow's diversified revenue base and improved margins should position it well. At current prices, the market appears to be pricing in prolonged stagnation — a scenario that may prove overly pessimistic. Technicals and Analyst Support Align Technically, the stock is deeply oversold, which supports the case for buying the dip. Zillow's relative strength index (RSI) is around 24 — its lowest reading in more than a decade — signaling extreme selling pressure that rarely persists indefinitely without at least a relief rally. While this week's three-day run of gains doesn't confirm a full reversal, it suggests selling pressure may be starting to ease. When multi-year lows coincide with extreme oversold readings and improving price action, contrarian investors take notice. Analysts are noticing too. Piper Sandler reiterated its Overweight rating last week and set a $70 price target, implying more than 50% upside from current levels. Is This a Buy Signal? Any stock exiting a 50% slide carries risk, and Zillow is no different. If mortgage rates remain elevated and housing activity stays muted, earnings could remain pressured. The market's reaction to last week's miss and management's cautious guidance shows investors will be sensitive to further signs of slowing momentum. But for investors who can tolerate that risk, the opportunity may be compelling. Improving price action, extremely oversold technicals, continued revenue growth and analyst upside form a persuasive combination. Expectations are low, sentiment is washed out, and the stock sits at decade-old price levels. Three consecutive up days don't prove the bottom is in. Still, after a 50% slide, they may be one sign that the market is starting to look at Zillow with fresh eyes.
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