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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

Why Zillow (ZG) Stock Is Trading Lower Today

ZG Cover Image

What Happened?

Shares of online real estate marketplace Zillow (NASDAQ: ZG) fell 6.4% in the afternoon session after news broke of a nationwide class-action lawsuit filed against the company, accusing it of deceptive practices related to its agent referral program. 

The lawsuit targeted Zillow's "Flex" agent program, claiming it misled potential homebuyers. According to the filings, the program allegedly steered customers to agents affiliated with Zillow rather than the agent who originally listed the property. The suit asserted that Zillow took a hidden commission cut of up to 40% from its agents on successful transactions, a fee that was not disclosed to the buyer or seller. Plaintiffs argued these practices inflated home purchase prices and violated consumer protection laws. The legal action sought billions of dollars in damages, creating significant regulatory and reputational risks for the online real estate giant.

The shares closed the day at $78.18, down 6.6% from previous close.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Zillow? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Zillow’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 5 days ago when the stock gained 3.5% on the news that Bernstein upgraded the stock to 'Outperform' from 'Market Perform' and significantly raised its price target. 

Analyst Nikhil Devnani boosted the price target to $105 from a previous $75. The upgrade reflected strong confidence in the company's outlook, as the firm cited expectations for mid-teens revenue growth and contributions from new business segments as key factors. This wave of optimism helped push the stock to a new 52-week high, underscoring positive investor sentiment surrounding Zillow's strategic direction.

Zillow is up 11.9% since the beginning of the year, but at $78.42 per share, it is still trading 9.6% below its 52-week high of $86.76 from September 2025. Investors who bought $1,000 worth of Zillow’s shares 5 years ago would now be looking at an investment worth $795.33.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.

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