Zillow Stock Price Forecast: The Plot Thickens

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Zillow's (Nasdaq: Z) stock price has come under intense pressure. It plunged by more than 10% on Friday, reaching a low of $49.12, its lowest level since December 13th. It has slipped by 20% from its YTD high, meaning it is now in a bear market.

Zillow woes continue

Zillow is one of the biggest prop-tech companies in the United States. It owns some of the most popular real estate websites in the US, including Streeteasy, Trulia, and Hotpads. It also provides a suite of real estate software, including ShowingTime+ and Bridge Interactive.

Zillow has been a troubled company for a while. Its biggest mistake was when it entered into the house-flipping industry. In the end, the company was left with thousands of homes that it had to sell at a discount. 

Zillow stock price crashed hard on Friday after the National Association of Realtors (NAR) said that it would pay $418 million to resolve claims of collusion within the real estate industry. It will make these payments within four years.

The settlement will have implications for the real estate marketing industry. In this case, it means that housebuyers will need to negotiate directly with real estate agents. Historically, house listings included a commission. 

Zillow’s business is also not growing as fast as it used in the past. The most recent report showed that its revenue jumped by just 9% to $474 million in the fourth quarter. Its residential revenue came in at $349 million while rentals rose by 37% to $93 million. Its mortgage division had $22 million in revenues.

Zillow’s revenue growth in the first quarter is expected to be about 7% to between $495 million and $510 million. The company expects that its full-year revenue growth will be in the double digits even as the transaction volume remains flat. 

The management believes that the turnaround strategy is working. It said that the end of the house-flipping venture allowed it to restrategise and reorganise its business into a Super App. It tested new products in 2023 and that they will focus on growth.

Zillow stock price forecast

(Click on image to enlarge)

Z chart by TradingView

The daily chart shows that the Z share price made a strong bearish rebound on Friday. This crash happened after the stock formed a triple-top pattern at around $58. In most cases, this pattern is one of the most bearish signs. It has also moved below the support at $50, the neckline of the triple-top.

The stock plunged below the 50-day and 25-day Exponential Moving Averages (EMA). Further, the Accumulation and Distribution (A/D) indicator has dropped. Therefore, the stock will likely continue falling as sellers target the key support at $45.

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