ZG heads into its June 2 earnings call with short sellers at their most aggressive in months, the stock down 21% from April, and options markets edging toward the most defensive posture of the past year.
Short interest has climbed steadily and without pause since mid-April. At 9.2% of the free float — up from 7.3% six weeks ago — it is the highest reading in the trailing 30-day data series, and the week-on-week build of 5.5% adds to a monthly increase of 18%. This is not noise. Shorts have been adding to positions through every week of May, including the week after Q1 results landed on May 6. The direction of travel is unambiguous.
The lending market is not yet screaming squeeze risk, but it is tightening at the margins. Availability is running at 304% — comfortable by most standards, with roughly three shares available for every one already borrowed — but that is down from above 460% at the start of the month, the sharpest compression seen across the 30-day window. Cost to borrow remains low in absolute terms at 0.60%, though it has risen 18% over the past week. The combination — more shorts, tightening availability, a tick higher on borrowing cost — describes a lending market where demand for the borrow is quietly increasing. Options are moving the same direction. The put/call ratio has climbed to 0.77, nearly two standard deviations above its 20-day average of 0.64, and represents the most defensive options positioning on ZG in the past year outside of occasional spike readings. Taken together, the setup looks cautious rather than comfortable.
The Street's reaction to May 6 earnings explains much of the re-rating. Citigroup cut its target from $78 to $68, while Barclays, Wells Fargo, Piper Sandler, Keybanc, and Mizuho each trimmed targets in the $45–$65 range — all within days of the print. The consensus mean target sits at $64.78, nearly 80% above the current price of $36.21, but that gap reflects analyst reluctance to fully revise rather than genuine conviction in a near-term recovery. RBC Capital is the outlier, holding an Outperform with a $95 target as recently as May 21 — a reading that looks increasingly disconnected from where the stock actually trades. Bulls point to Q1 revenue growth of 18% to $708 million and continued earnings estimate upgrades, with EPS momentum ranking in the 87th percentile on a 30-day basis. Bears focus on Q2 guidance risk, the drag from a frozen housing transaction market, and the antitrust overhang. The PE multiple has compressed sharply — down nearly five points over 30 days — reflecting how quickly the post-earnings optimism has been given back.
Institutional ownership adds an interesting wrinkle. Caledonia (Private) Investments holds 16.3% of shares — a concentrated anchor position. Capital Research added 6.5 million shares through April, and Tiger Global added 1.3 million through March. Independent Franchise Partners holds 7.0% after adding nearly 3 million shares. These are conviction holders, not momentum chasers, and their continued presence sets a floor of sorts below the day-to-day price action driven by the short build.
After Q1 results, ZG closed essentially flat on the day (+0.4%) but gave back 11.4% over the following five sessions — the pattern that likely explains why shorts have been rebuilding since. The next print on June 2 is therefore less about whether Zillow can grow revenue and more about whether Q2 guidance is sufficient to arrest the persistent post-earnings drift that has defined the stock's behaviour this quarter.
See the live data behind this article on ORTEX.
Open ZG on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
