TenQ

The Zillow story

Zillow runs a property portal funded by agents, mortgages and rentals, with the central question whether connecting home searches to agents and financing can turn faster revenue growth into sustained profits.

Written from Zillow's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $27.44share price, last close
  • $6.2Bmarket value
  • 17/36TenQ Score checks passed

The story in brief

  • Outgrowing the housing market. In the quarter to June 2026, revenue rose 18% to $772 million, compared with broader housing market growth of 6%.
  • Growth beyond agent advertising. In the quarter to June 2026, mortgages revenue increased 75% to $84 million and rentals revenue rose 31% to $209 million.
  • Profit measures diverge. Zillow reported a $4 million net loss in the quarter to June 2026, alongside adjusted net income of $118 million.

What drives the business

  • Zillow is expanding from property searches and agent advertising into connected services spanning touring, financing and renting, supported by a database of approximately 173 million U.S. homes.
  • Zillow Preferred connects consumers with agents paid when transactions close, while Zillow Home Loans integrates financing into the experience, and connections through Enhanced Markets exceeded 40% of agent connections exiting 2025.
  • Residential remained the largest revenue line at $465 million in the quarter to June 2026, growing 7%, while mortgage growth reflected a 95% increase in purchase loan origination volume to $2.2 billion.
  • Rentals distribution includes syndication agreements with Redfin and Realtor.com, and multifamily revenue growth of 42% drove rentals expansion in the quarter to June 2026.
  • The August 2026 FTC resolution preserved the Redfin syndication partnership, with Zillow and Redfin also set to offer standalone multifamily advertising products in 2027.

What the price assumes

At $27.44, the reverse DCF cannot establish a reliable implied growth rate because its negative cash flow and operating earnings premise conflicts with positive free cash flow of $258 million over the last twelve months and a 0.4% operating margin.

Revenue growth accelerated to 17.7% over the last twelve months from a 9.7% annual pace over the last three years, but that record cannot be compared reliably with an unmeasurable price assumption.

TenQ's cash yield check passes at 4.2% against its 3.0% bar, while its earnings yield check fails at 0.8% against the Treasury benchmark of 5.2%.

What could change the story

  • Housing affordability and limited inventory constrain transactions, while average monthly unique users and visits both declined 2% in the quarter to June 2026.
  • The 0.4% operating margin falls short of TenQ's sector benchmark of 11.0%, leaving little operating profit relative to revenue.
  • Despite the subsequent FTC resolution, comparisons of adjusted profitability require care because Zillow began excluding FTC litigation costs in the quarter to June 2026 and revised the preceding quarter on the same basis.
  • Stock-based pay of $363 million exceeded free cash flow of $258 million over the last twelve months, and the share count rose 4.9% over the last three years.
  • Capital returned reached 424.8% of free cash flow in TenQ's check, while Zillow ended the quarter to June 2026 with $682 million in cash and investments against total debt of $230 million.

What to watch next

  • Management said in the August 2026 release that Zillow remained on track toward its full-year goals, making continued growth beyond the housing market an important test at the next release.
  • Agent connections through Enhanced Markets, mortgage origination volume and multifamily revenue growth will show whether connected services and rental distribution keep expanding despite weaker traffic.
  • Reported earnings, operating cash flow and the reconciliation to adjusted free cash flow will show how much operating performance supports continued share repurchases.

Sources

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