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This Month's Bonus Content Zillow's 3-Day Rally Could Mean More Than You ThinkBy Sam Quirke. Article 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, Zillow Group Inc. (NASDAQ: ZG) has quietly done something it hadn't managed in weeks: it posted three straight days of gains. That may not sound dramatic, but given a nearly 50% collapse and extreme bearish sentiment, it's notable. Shares trade around $45 — roughly where they were in 2014 — after nearly two years of gains were erased in the past five months. A sluggish housing market driven by elevated mortgage rates and a weak earnings report last week have not helped. Still, with sentiment near rock-bottom and price action showing signs of stabilization, could this short run of gains be the start of something bigger? The Fundamentals Don't Match the Fear The latest earnings report may have accelerated the slide, but it didn't start it — Zillow has been under pressure since September. Last week's results were not disastrous: earnings missed by only a few cents, while revenue beat expectations and grew 18% year over year. Adjusted EBITDA rose year over year and margins expanded, helping the company reach full-year profitability. The chart may look ugly, but this wasn't the kind of report you'd expect from a business in terminal decline. Rentals stood out in the quarter, delivering robust growth—especially in multifamily—and management expects expansion to continue into next year. Rentals are now a key 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 sell-off reflects anxiety about AI disruption and private listing networks. Investors worry AI-powered portals could erode Zillow's dominance — a concern that stretches across the broader tech sector. But consumer behavior suggests Zillow is likely to remain the default destination for home searches 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 Zillow still faces an uphill battle in the near term. The 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. That said, cyclical troughs can create opportunities. 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 view 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) sits around 24, its lowest reading in more than a decade. That signals extreme selling pressure that rarely persists indefinitely without at least a relief rally. While a three-day run doesn't confirm a full reversal, it does suggest selling pressure may be starting to exhaust itself. When multi-year lows coincide with extreme oversold readings and improving price action, contrarian investors take notice. Analysts are taking note as well: 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 emerging from 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 cautious guidance suggests investors will be sensitive to signs of slowing momentum in the quarters ahead. If you can tolerate that risk, however, the opportunity may be compelling. Improving price action, extremely oversold technicals, continued revenue growth and analyst upside create a coherent contrarian case. 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. But after a 50% slide, they may be one sign that the market is beginning to look at Zillow with fresh eyes.
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