Zillow Group (ZG) opened 2026 with Q1 revenue of US$708 million and basic EPS of US$0.20, alongside net income of US$46 million, as investors weighed these figures against a share price of US$44.04. The company reported revenue of US$598 million in Q1 2025 and US$708 million in Q1 2026, while quarterly basic EPS moved from US$0.03 to about US$0.20 over the same period. Trailing twelve month EPS and net income changed from US$0.10 and US$23 million at Q4 2025 to US$0.25 and US$61 million at Q1 2026. Taken together, the latest report points to firmer margins and creates a basis for examining how durable this profitability trend might be.

See our full analysis for Zillow Group.

With the headline numbers on the table, the next step is to see how this earnings profile lines up with the main bullish and bearish narratives that have formed around Zillow Group, and where those stories may need updating.

Profit swing on trailing US$61 million

• Over the last twelve months, Zillow moved from a trailing loss of US$112 million at Q4 2024 to trailing net income of US$61 million and basic EPS of US$0.25 at Q1 2026, alongside trailing revenue of US$2.7b.
• What stands out for the bullish narrative is that this shift to profitability sits next to forecasts for about 36.8% annual earnings growth and 11.9% annual revenue growth. Within that context:
  • The current share price of US$44.04 is well below a cited DCF fair value of US$104.66, which bulls point to when arguing that the market is not fully pricing in those forecasts.
  • The move from losses to a trailing profit of US$61 million supports the idea that recent product and cost decisions are starting to show up in the income statement.

Bulls argue that this earnings reset could be the starting point for a longer profit run rather than a one off shift, which is exactly what the DCF fair value work is trying to capture in its assumptions. 🐂 Zillow Group Bull Case

Premium 3.7x P/S keeps expectations high

• The stock trades on a P/S of 3.7x compared with a peer average of 1.8x and a US real estate industry average of 2.6x, meaning investors are already paying more per dollar of sales than in many comparable companies.
• Bears highlight this premium P/S multiple as a key concern because:
  • Even with the DCF fair value at US$104.66 and forecasts for 11.9% annual revenue growth, a richer sales multiple than peers can make the stock more sensitive if those forecasts are revised.
  • Trailing twelve month revenue of US$2.7b and net income of US$61 million still leave plenty of room between today’s margins and the higher margin levels that more optimistic scenarios assume.

Skeptics warn that paying a premium multiple at US$44.04 only works if the company continues to deliver on the growth and margin story that is currently built into the forecasts. 🐻 Zillow Group Bear Case

Q1 2026 profit lift versus recent quarters

• Within the last five reported quarters, net income moved from a loss of US$52 million in Q4 2024 to a profit of US$46 million in Q1 2026, while quarterly revenue rose from US$554 million to US$708 million over the same span.
• Consensus narrative points out that the business is leaning more on software, rentals and other services, and this Q1 pattern fits that story because:
  • Basic EPS has swung from a loss of US$0.22 in Q4 2024 to positive figures in each of the last four quarters, reaching about US$0.20 in Q1 2026.
  • Trailing revenue has stepped up from US$2.2b at Q4 2024 to US$2.7b at Q1 2026, which gives more scale for any efficiency gains or higher margin products to show up in future results.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Zillow Group on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If this mix of bullish and cautious views feels split, treat it as your cue to check the numbers yourself and decide how convincing the earnings shift really is. Take a closer look at the 3 key rewards.

Explore Alternatives

Despite the profit swing, Zillow Group still carries a premium 3.7x P/S, with earnings and margins that leave a gap to more optimistic scenarios.

If that kind of pricing risk feels uncomfortable, you can quickly compare stocks where valuations look tighter by checking out the 51 high quality undervalued stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.