Zillow Slides 23% as Analysts Cite Weak Fundamentals; Recommend Digital Ad Stock Instead

Zillow Group (ZG) has fallen 23.1% over the past six months to $61.81 as of February 3, 2026, with analysts warning the stock remains unattractive despite its lower price. They cite three key weaknesses: a 6.6% annual sales decline over five years, a subpar 11.4% average free cash flow margin, and a deteriorating ROIC that has dropped by 1.7 percentage points annually. The stock trades at 29.6× forward P/E, a valuation analysts say embeds excessive optimism given Zillow’s low-quality fundamentals. Instead, they recommend a high-quality digital advertising platform benefiting from the creator economy, part of a curated list of momentum stocks that have delivered a 244% five-year return through June 30, 2025.