Why Zillow Stock Dropped Today

By Joe Tenebruso – Feb 11, 2026 at 8:33PM ESTKey PointsZillow's rentals and mortgages businesses are growing quickly.Yet a projected earnings shortfall drove many investors to sell.These 10 Stocks Could Mint the Next Wave of Millionaires ›NASDAQ: ZGZillow GroupMarket Cap$13BToday's Changeangle-down(-17.13%) $9.32Current Price$45.10Price as of February 11, 2026 at 4:00 PM ETLawsuits aren't cheap.Shares of Zillow Group (ZG 17.13%)(Z 16.75%) sank on Wednesday after the real estate marketplace said legal costs would be a drag on its earnings in 2026. By the close of trading, Zillow's stock price was down roughly 17%. Image source: Getty Images. Zillow's ancillary businesses are performing well Zillow's revenue rose 18% year over year to $654 million in the fourth quarter. The gains were fueled by a 45% jump in the company's rental revenue, to $168 million, and a 39% increase in mortgage revenue to $57 million. "Consumers are increasingly choosing Zillow to help them move from discovery to transacting," CEO Jeremy Wacksman and CFO Jeremy Hofmann said in a letter to shareholders. ExpandNASDAQ: ZGZillow GroupToday's Change(-17.13%) $-9.32Current Price$45.10Key Data PointsMarket Cap$13BDay's Range$43.80 - $52.2752wk Range$43.80 - $90.22Volume3.1MAvg Vol828KGross Margin74.87% Zillow's profitability also improved. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed 33% to $149 million. Legal costs could weigh on earnings in 2026 Investors, however, appeared to focus more on Zillow's guidance. Management expects revenue of $700 million to $710 million in the first quarter, with adjusted EBITDA of $160 million to $175 million. That was below Wall Street's expectations, which had called for adjusted EBITDA of about $184 million. Zillow said legal expenses related to several ongoing lawsuits are likely to reduce its adjusted EBITDA margin by 2 percentage points in the first quarter. "We are confident in our positions and approach, and we do not expect these matters to have a material impact on our financial position or long-term strategy," Wacksman and Hofmann said. Read NextSep 29, 2022 •By Rick Munarriz2 Stocks That Had It Right All AlongJan 10, 2022 •By Rick Munarriz3 Stocks That Can Double in 2022 After Being Cut in Half Last YearNov 11, 2021 •By Chris HillZillow's Falling -- Don't Rush InNov 3, 2021 •By Rick Munarriz3 Reasons Why I'm OK With the End of Zillow OffersOct 25, 2021 •By Chris HillZillow's Pause and Disney's DelaySep 27, 2021 •By Rick Munarriz5 Shocking Stocks That Are Trading Lower in 2021About the AuthorJoe Tenebruso is a contributing Motley Fool stock market analyst. Previously, Joe was an investment analyst for Stock Advisor, Income Investor, and Crypto Society, as well as several other market-beating investing services. He graduated summa cum laude from Rutgers University with a Bachelor of Science in Finance.tmfguardianX@Tier1InvestorStocks MentionedZillow GroupNASDAQ: ZG$45.10 (17.13%) $9.32Zillow GroupNASDAQ: Z$45.55 (16.75%) $9.16*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.