Should Zillow Group's (ZG) AI-Powered Virtual Staging Spark a New Phase in Its Digital Strategy?

• Earlier in September 2025, Zillow Group introduced Virtual Staging, an AI-powered feature now available within its premium listing platform, Showcase, which allows home shoppers to interactively restyle rooms with various design options and view immersive property imagery.
• This marks the first major integration of technology acquired through Zillow's 2024 purchase of Virtual Staging AI, signaling a broader shift toward seamlessly embedding advanced AI into consumer real estate experiences to empower both buyers and agents.
• We'll explore how Zillow's integration of AI-powered Virtual Staging could influence its digital transformation narrative and future growth opportunities.

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Zillow Group Investment Narrative Recap

To be a Zillow Group shareholder, you need to believe in the company’s continued digital reinvention of real estate, where product innovation and deeper partnerships drive above-industry revenue growth, even if housing market activity stays muted. The rollout of AI-powered Virtual Staging directly supports this digital transformation, yet in the near term the biggest lift, and main risk, remains tied to reviving transaction volumes, which are sensitive to interest rates and affordability. For now, this new feature strengthens the longer-term story but doesn't materially shift those short-term levers or risks.

Of Zillow's recent announcements, the August partnership with Berkshire Hathaway HomeServices stands out in direct relevance: it puts Virtual Staging and Showcase tools in more agents’ hands, amplifying the new technology’s potential adoption and building stickier agent relationships, a key source of recurring revenue. This offers a concrete connection between Zillow’s innovation push and the pursuit of growth catalysts amid a challenging market for transactions.

By contrast, investors should be aware of how ongoing commission pressure and regulatory uncertainty could impact agent spend and core revenues if...

Read the full narrative on Zillow Group (it's free!)

Zillow Group's narrative projects $3.6 billion in revenue and $415.2 million in earnings by 2028. This requires 14.8% yearly revenue growth and a $477.2 million increase in earnings from the current -$62.0 million.

Uncover how Zillow Group's forecasts yield a $86.96 fair value, a 3% upside to its current price.

Exploring Other Perspectives

Seven private investors in the Simply Wall St Community provide fair value estimates for Zillow ranging from US$28.38 to US$91.86 per share. While these cover a wide spectrum, the most pressing issue remains that persistently low home affordability may cap transaction volumes and limit revenue opportunities, underscoring the importance of understanding all sides of the story.

Explore 7 other fair value estimates on Zillow Group - why the stock might be worth as much as 9% more than the current price!

Build Your Own Zillow Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Zillow Group research is our analysis highlighting 2 key rewards that could impact your investment decision.
• Our free Zillow Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Zillow Group's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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