2Q26 Online Real Estate Preview: Resetting Expectations In Different Directions

Research evidence excerpt

2Q26 Online Real Estate Preview: Resetting Expectations In Different Directions

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US Internet Equities

Americas2Q26 Online Real Estate Preview: Resetting

Expectations In Different Directions Internet Services

Stephen Ju

Analyst

stephen.ju@ubs.com

Key Takeaway +1-212-882 5192

We preview 2Q26 earnings for Zillow (ZG) and Compass (COMP) against a mixed Nur Robleh

housing backdrop, with mortgage rates moving ~50bps higher since 1Q26 quarter-end Associate Analyst

and industry expectations for a meaningful housing recovery remaining subdued. nur.robleh@ubs.com

Despite this pressure, Existing Home Sales (EHS) accelerated to +2% YOY growth in +1-212-713 4530

2Q26, providing a modest improvement vs 1Q26. For Zillow, we expect investors to

focus on the durability of its mid-teens growth framework and the credibility of its

increasingly 2H weighted margin expansion outlook amid elevated legal costs and

tougher comps in the Residential Revenue segment in 2H26. For Compass, we think

2Q26 should provide further evidence of merger integration execution, with attention

centered on synergy realization, agent productivity, and the company's ability to convert

scale benefits into accelerating cash flow generation.

Our Updated Thoughts

We remain constructive on both Zillow (Buy) and Compass (Buy), though for different

reasons. For Zillow, recent investor concern has centered on the company's increasingly

2H weighted EBITDA margin framework. While we modestly lower FY26 estimates, we

believe the stock's ~20% decline since 1Q26 earnings and current valuation of ~ 8x

FY27 EBITDA reflects a compelling risk/reward. We continue to see a path to sustained

growth above underlying housing activity, supported by Rentals, Mortgages, Showcase,