ZG heads into its August 5 earnings report with short sellers adding positions at an accelerating pace — even as the stock posts its best weekly gain in months.
The tension at the heart of this week's setup is a rare divergence: the stock jumped 13% in five days, yet short interest climbed 16.6% over the same period, reaching 7.7% of free float. That combination — a sharp rally met by rising bearish conviction — makes the earnings print next week the clearest near-term test of who is right.
The positioning picture is notably split. Short sellers have been building steadily since mid-July, with shares short rising roughly 23% over the past month to 3.83 million. The ORTEX short score has also drifted higher, reaching 57.2 this week from 52.5 on July 20 — a gradual but consistent re-rating toward more bearish pressure. Against that, the borrow market remains relaxed: availability is running at around 279%, well into normal territory, and the cost to borrow is just 0.53% — barely moved from a month ago. New shorts face no friction entering the trade. Options, meanwhile, have eased off a defensive stance. The put/call ratio is 1.06, slightly below its 20-day average of 1.12 and well off its 52-week high of 2.77. That suggests the market is not pricing dramatic downside into the print — at least not through the options market.
The Street presents a more complicated read. The bull case centres on Zillow's platform-driven market share gains, strong forward EPS momentum, and revenue growth running close to 16% annually. The EPS momentum factor scores are genuinely strong — 84th percentile on a 90-day basis and 80th percentile on forward year-on-year growth. But the valuation work is harder to square: UBS cut its price target from $75 to $50 on July 31, even while maintaining a Buy. That move is notable — a 33% target reduction on the day before earnings from a bellwether firm is not routine housekeeping. Goldman Sachs carried a $40 Neutral target as of mid-June, and with the stock now at $34.69, that leaves the consensus mean target at $60.64, implying substantial upside — but the direction of recent analyst revisions has been uniformly downward. Most targets set prior to May 2026 have been cut materially, and the spread between the highest target ($95 from RBC Capital) and current price tells you how far valuation expectations have already fallen. The EV/EBITDA of 8.0x has ticked lower over the past month, reflecting both the earnings revision cycle and the stock's own discount to prior levels.
Institutional ownership offers one counterpoint to the bearish flow. Capital Research added over 6.4 million shares through June 30, and Independent Franchise Partners added nearly 3 million through the March quarter. Those are sizeable additions at levels above where ZG trades today. Founder Richard Barton holds 4.6% of shares with no reported change in his position. The ownership structure suggests long-term holders have been adding into weakness rather than exiting — a different signal than what the short interest trend implies.
Among peers, JLL and CBRE both gained roughly 5–9% on the week, broadly consistent with a rising-tide move across real estate services. ZG's 13% gain meaningfully outpaced that group, which amplifies both the optimism and the risk embedded in the current price. The two prior earnings reactions in the data lean cautious: the May print saw a flat next-day move followed by an 11% five-day decline, and the June event saw an immediate 2.3% drop. Neither suggests the market tends to reward ZG on the print.
The August 5 release is therefore the session that determines whether the week's rally reflected genuine anticipation of strong numbers — or gave short sellers an improved entry point ahead of a result that has historically disappointed on a five-day view.
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