Is Zillow (Z) Stock a Buy After Falling Nearly 13% in 1 Day?
Is Zillow (Z) Stock a Buy After Falling Nearly 13% in 1 Day?
Selena Maranjian, The Motley FoolTue, August 11, 2026 at 7:50 AM UTC
0
Key Points -
Zillow is operating in a tough real estate market at the moment.
It's still growing, though.
It faces challenges, but it has diversified into rentals and mortgages.
10 stocks we like better than Zillow Group ›
&&
If you're interested in the real estate market and would like to profit from it without actually buying homes or other buildings, you might be invested in Zillow Group(NASDAQ: Z)(NASDAQ: ZG) -- or may be thinking of investing in it. The stock is down about 60% over the past year, and it dropped nearly 13% in a single day in early August, before closing down 8%.
Image source: Getty Images.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again.In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
&&
That's a sign of concern regarding the digital real estate specialist, and it may also present a good buying opportunity. Here's a closer look at the situation.
The reason for the drop was the company's second-quarter earnings report, which featured:
Revenue up 18% year over year
Mortgage revenue up 75%
Rentals revenue up 31%
So far, so good, right? The report also featured this, though:
Traffic to Zillow's mobile apps and sites was down 2% year over year.
Zillow's average monthly unique users declined 2% to 239 million (but this was true across the category, and Zillow fared better than average).
Perhaps the worst news is that Alphabet's Google will now display real estate listings in all 50 states, which is very likely to have an impact on Zillow.
There are some positives for Zillow, though. Per management, it's implementing artificial intelligence (AI) effectively: "Consumers who use AI mode spend more than three times as long on Zillow, view more than twice as many homes, run nearly three times as many searches -- and contact an agent at nearly three times the rate of consumers who don't use AI mode. The same pattern holds in rentals..."
Advertisement
Greater use of AI may be behind the company's recent layoff of 500-plus people. That's bad for those people, but investors often see layoffs positively, if they result in leaner, more profitable operations.
So, should you invest in Zillow? Well, maybe, if you're doing so for the long term and you're risk-tolerant. The real estate market is tough these days, and the company still posted a double-digit gain. Alternatively, you might consider a real estate fund, which offers greater diversification.
Should you buy stock in Zillow Group right now?
Before you buy stock in Zillow Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Zillow Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $399,832!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,374,595!*
Now, it’s worth noting Stock Advisor’s total average return is 968% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of August 11, 2026.
&&
Selena Maranjian has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Zillow Group. The Motley Fool has a disclosure policy.
Source: “AOL Money”
