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High materiality8/10

Zillow misses Q3, lowers guidance; near-term pressure but transition to Preferred could unlock value

Nov 5, 2026, 2:41 PM EST1 sourcesAI-analyzed

Why it may matterVerify against the original reporting

Evidence of immediate price decline on miss and guidance cut; down ~9% indicates near-term risk to fundamentals and valuation, similar to prior post-earnings moves when guidance deteriorates, despite long-term transition potential.

AI summary

What happened, with direct paths to the underlying reporting

Zillow reported a weaker third quarter, missing EPS and revenue and guiding lower for 2026-27. Needham's Bernie McTernan kept a Hold but slashed earnings estimates amid housing-market weakness and a ~100 basis-point rise in mortgage rates to the mid-7% range. The company continues its shift from Market-Based to Preferred pricing, which could improve revenue per connection but heightens seasonality risk; near-term earnings remain pressured.

Zillow Q3 miss; trims full-year revenue outlook.
Needham cuts 2026/2027 EBITDA; cites housing headwinds and higher mortgage rates.
Shift to Preferred model could lift revenue per connection but adds seasonality risk.
Shares fall about 9.4% to around $30.72 on the update.

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