Two Stocks Poised for Growth with a Fed Rate Cut: Zillow and CoStar

Two stocks to consider for potential rate-cut benefits are Zillow Group Inc (NASDAQ: ZG) and CoStar Group Inc (NASDAQ: CSGP). Zillow operates a residential real estate platform, generating revenue through advertising, rental listings, and mortgage origination services. CoStar operates on the commercial side, with online marketplaces such as Apartments.com, LoopNet, and Homes.com. Both companies have shown impressive performances during previous rate-cut cycles, with Zillow surging 900% and CoStar benefiting from falling rates and increased commercial leasing activity. Analysts are leaning bullish on Zillow, with price targets ranging as high as $95, while CoStar's valuation and P/E ratio of 350 may deter some investors.

In anticipation of potential Federal Reserve rate cuts, investors are focusing on stocks that could benefit from cheaper financing and increased consumer demand. Two companies that stand out in this context are Zillow Group Inc. (NASDAQ: ZG) and CoStar Group Inc. (NASDAQ: CSGP). Both companies operate in the real estate sector and have shown impressive performances during previous rate-cut cycles.

Zillow Group Inc. operates a residential real estate platform, generating revenue through advertising, rental listings, and mortgage origination services. The company has been in a solid uptrend for nearly three years, with a 40% increase since April alone, bringing it close to multi-year highs. Analysts are bullish on Zillow, with price targets ranging as high as $95, implying nearly 20% in targeted upside . During the COVID-era easing cycle of 2020 and 2021, shares surged more than 900%, demonstrating the sensitivity of Zillow's business model to housing activity.

CoStar Group Inc., on the other hand, operates on the commercial side of the property market, with online marketplaces such as Apartments.com, LoopNet, and Homes.com. While CoStar's stock has rallied less aggressively since April, it remains well-positioned to benefit from a rate-cut environment. Its last easing cycle performance was impressive, reflecting how quickly falling rates can expand transaction activity across its platforms. Fundamentally, CoStar is coming off a string of quarters where it topped analyst expectations, leaving it in prime shape to capitalize on rate cuts .

Both Zillow and CoStar have shown impressive performances during previous rate-cut cycles, with Zillow surging 900% and CoStar benefiting from falling rates and increased commercial leasing activity. Analysts are leaning bullish on Zillow, while CoStar's valuation and P/E ratio of 350 may deter some investors. However, the bigger story is the sustained upside both companies have proven they can generate over multiple quarters if the real estate cycle turns in their favor.

References:
https://www.marketbeat.com/instant-alerts/filing-amundi-grows-position-in-zillow-group-inc-z-2025-09-08/
https://www.marketbeat.com/stock-ideas/2-stocks-that-could-rocket-on-a-fed-rate-cut/