Zillow Group heads into the final weeks before its June 2 earnings report with short sellers adding exposure and options traders turning more cautious — a setup that stands out against a stock that has actually gained ground over the past month.
Short interest has been climbing with real conviction. At 8.0% of free float, the current short position is near a four-week high and has risen about 20% in aggregate from the mid-April trough around 6.6%. The week-on-week build of roughly 5.6% in estimated short shares marks one of the more consistent stretches of accumulation in the 30-day window, suggesting this is a deliberate positioning shift rather than noise. The ORTEX short score, now at 50.8, has drifted higher every day this week, and at 29 days-to-cover rank, there is no acute squeeze risk — but the direction of travel is clear.
The options market has shifted alongside the shorts. The put/call ratio has climbed to 0.59, running about 1.3 standard deviations above its 20-day average of 0.37 — a meaningful jump. Six weeks ago the PCR was sitting at 0.14, essentially flush with calls; the rotation into puts since late April is notable. The borrow market adds some nuance here: cost to borrow, though up nearly 19% on the week to 0.55%, remains very cheap in absolute terms. Availability is not distressed. The combination of cheap borrow and rising short positions implies this is conviction-driven rather than technically squeezed positioning.
The Street is divided, and target cuts have been the dominant theme. UBS trimmed its target from $80 to $75 last week while keeping its Buy rating, and Barclays cut from $66 to $58 at Equal-Weight. Both moves came close to the February earnings print, which was the catalyst for an earlier round of target reductions — Goldman moved to $62 from $78, Citigroup to $78 from $100. The mean price target of roughly $73 still sits well above the current price of $43.88, a gap of around 66%. Bulls point to Zillow's rental revenue momentum, improving margins, and its commanding position across all stages of the home lifecycle. Bears focus on stalled transaction volumes in the core residential business, rising regulatory noise, and a competitive agent market that leaves monetisation harder than the headline growth implies. Factor scores offer partial comfort for the bull case: forward EPS estimate momentum ranks in the 96th percentile, and near-term EPS momentum scores 80. EPS surprise, though, ranks just in the 14th percentile — the market has not been underestimating this company.
Institutional ownership is stable and concentrated. Caledonian Private Investments holds about 16% of shares, with a modest trim in the last filing period. Vanguard, BlackRock, and Fidelity (FMR) are all incrementally adding, as are Capital Research and Tiger Global, which added over 1.2 million shares in its most recent reported period. Co-founder Richard Barton holds roughly 4.5% and last reported adding 300,000 shares in February. Insider data in the snapshot is stale — last activity was November 2024 — so it adds little to the current read.
The most arresting data point in the recent history is the February 11 earnings reaction: the stock fell nearly 20% in a single session and never fully recovered the loss over the following week. With the next print set for June 2, the options market appears to be repricing some of that downside risk early. That prior reaction, combined with the current PCR shift and steady short interest accumulation, means the key question at the next print will be less about Zillow's strategic direction and more about whether near-term revenue trends can close the wide gap between where the stock trades and where analysts think it is worth.
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