November 5, 2026 | TickerRoast Markets Analysis
Zillow Group shares fell about 15.2% to $28.74 in extended trading on Wednesday, Nov. 4, 2026, based on Yahoo Finance data at about 8 p.m. ET, after the company reported third-quarter results and a fourth-quarter outlook shaped by what it called a “recent rapid rise in mortgage rates.” The Class C shares had closed the regular session at $33.90, up about 9.4% on the day with the rest of the market.
The quarter itself was not the problem. What moved the stock, in my reading, is the company’s view of the next three months for the U.S. housing market.
Revenue Grew While the Industry Stalled
Total revenue rose 7% from a year earlier to $724 million. Zillow pointed out that the residential real estate industry grew only 1% in the quarter by its measure, and that industry purchase mortgage origination volume fell an estimated 4%. Chief Executive Jeremy Wacksman said the company had outperformed “during one of the toughest housing markets in a generation.”
The segments tell two different stories. For Sale revenue was flat at $489 million, and within it Residential revenue, the agent advertising business, fell 4% to $419 million, which the company blamed on higher-than-expected mortgage rates pressuring transaction volume. Mortgages revenue rose 32% to $70 million on a 55% increase in purchase loan origination volume to $2.0 billion. Rentals was the bright spot, growing 26% to $220 million, with multifamily revenue up 35%.
In its shareholder letter, Zillow said Rentals now makes up 30% of total revenue, up from 21% two years ago. That diversification is real, but the For Sale business is still the larger part of the company, and it is the part most exposed to rates.
A Legal Settlement Drove the Net Loss
Zillow posted a net loss of $158 million, or $0.70 a diluted share, compared with net income of $10 million, or $0.04, a year earlier. The swing is mostly explained by a $165 million charge for the Zillow Offers securities class action settlement, net of expected insurance recoveries, which pushed general and administrative expenses up $152 million from a year earlier.
Excluding that settlement, the picture is steadier. Adjusted net income was $124 million, or $0.55 a share, up from $0.44, and Adjusted EBITDA was $182 million, a 25% margin, within the outlook range the company had given. Operating cash flow rose to $162 million, while adjusted free cash flow fell to $46 million from $107 million. Traffic was weaker, with average monthly unique users down 3% to 215 million and visits down 5% to 2.3 billion.
The Fourth-Quarter Guide Is the Real Story
For the fourth quarter, Zillow expects total revenue of $635 million to $665 million and Adjusted EBITDA of $100 million to $135 million, implying an 18% margin at the midpoint. That is a sharp step down from the 25% margin it just reported. The company expects For Sale and Residential revenue to fall roughly 9% to 15% from a year earlier, and Mortgages revenue to decline by a low single-digit percentage at the midpoint.
The key assumption is about the industry rather than Zillow itself. The company said that, given the rise in mortgage rates, it now expects industry purchase mortgage originations to fall 10% to 15% year over year in the fourth quarter, compared with an estimated 4% decline in the third quarter. Part of the expected For Sale decline reflects its own transition of agent connections to Preferred partners, which it estimated at 400 to 500 basis points of headwind, but most of the slowdown traces back to the market.
For the full year, Zillow expects total revenue growth of about 10% to 11%, Rentals growth of about 30% and Adjusted EBITDA of $655 million to $690 million. I read that as a company that still expects a decent year overall, but whose most rate-sensitive business has hit a wall in the last quarter of it.
Balance Sheet and What Comes Next
Zillow ended the quarter with $707 million in cash and investments and an undrawn $500 million revolving credit facility, for total liquidity of $1.2 billion. It repurchased 0.5 million shares for $20 million during the quarter and has about $1.1 billion left on its authorizations.
The longer-term chart shows how much ground the stock had already lost. Based on Yahoo Finance data, Zillow’s Class C shares traded around $73 a year ago, and the after-hours price would put them close to their 52-week closing low of $27.13. With the 10-year Treasury yield near 4.89% and the Federal Reserve holding rates at 3.75% to 4% after an October meeting in which two officials voted to hike, I expect the stock to keep tracking mortgage rates more closely than its own execution until the housing market finds a floor.
Sources
- Zillow Group Reports Third-Quarter 2026 Financial Results (Exhibit 99.1) — Zillow Group / SEC EDGAR
- Zillow Group Q3 2026 shareholder letter (Exhibit 99.2) — Zillow Group / SEC EDGAR
- Federal Reserve issues FOMC statement (Oct. 28, 2026) — Federal Reserve
- Z historical and after-hours prices — Yahoo Finance
Market data: Yahoo Finance, close of 2026-11-04. Charts generated by TickerRoast from this data.
Disclaimer: This article is for informational and educational purposes only. It provides general financial and business analysis and does not constitute investment advice, a personal recommendation, a recommendation to buy, sell or hold any security, or an offer to transact in any financial instrument. Information is based on publicly available sources as of November 5, 2026 and market data as of the 2026-11-04 close (Yahoo Finance). Past performance is not a reliable indicator of future results; forecasts are uncertain and actual results may differ materially. Investing in shares involves risk, including the loss of capital. The publisher does not guarantee the accuracy or completeness of the information and accepts no responsibility for investment decisions made on the basis of this article. Readers should consult official company disclosures, conduct their own research and, where appropriate, seek advice from a licensed financial adviser. Conflicts of interest: At the time of writing, the author and TickerRoast have no position in the securities mentioned and receive no compensation from the companies discussed. This article was prepared with the assistance of AI tools and is based on the sources listed above.
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