Zillow Group: Insider Selling vs. Institutional Buying – Is This the Right Time to Buy?

In the ever-evolving real estate tech sector, Zillow Group (NASDAQ:Z) has long been a bellwether for innovation and market sentiment. As of Q4 2025, the company's stock has drawn attention for a striking dichotomy: while insiders have aggressively sold shares, institutional investors have quietly increased their stakes. This divergence raises a critical question: Is Zillow's stock undervalued, or are insiders signaling caution?

The Insider Exodus: A Closer Look

Zillow's Q3 2025 financials were robust, with revenue rising 16% year-over-year to $676 million and a net income margin of 1%-a 400-basis-point improvement year-over-year according to financial reports. Yet, this optimism has not translated into insider confidence. In Q4 2025 alone, executives and directors sold over $1.6 million in shares. For instance, Jennifer Rock, the Chief Accounting Officer, sold 6,001 shares in late November at prices ranging from $71.12 to $73.83, reducing her holdings by 5.74%. Similarly, CFO Jeremy Hofmann sold 13,335 shares under a Rule 10b5-1 trading plan, while COO Jun Choo offloaded 25,575 shares at $91.06 apiece.

Notably, many of these sales were tied to tax obligations from restricted stock unit (RSU) vesting or pre-scheduled trading plans according to market analysis. Such transactions are often routine and not necessarily bearish. However, the sheer volume-over 657,000 shares sold in Q4-suggests a broader trend of insiders locking in gains amid a stock that has traded in a $70–$90 range since mid-2025 according to trading data.

Institutional Confidence: A Countervailing Force

While insiders have been net sellers, institutional investors have taken a different approach. In October and November 2025, K.J. Harrison & Partners Inc. and Strs Ohio both increased their stakes in Zillow. K.J. Harrison & Partners added 10,000 shares in October, while Strs Ohio boosted its holdings by 38% to 16,655 shares. These moves align with broader institutional activity in Q2 and Q3, where firms like Accurate Wealth Management and Vanguard Group increased their positions according to filings.

Institutional ownership now accounts for 71.01% of Zillow's float according to market data, a figure that has remained stable despite insider selling. This suggests that long-term investors see value in Zillow's business model, particularly its diversified revenue streams. For Sale revenue grew 10% year-over-year to $488 million, while Rentals revenue surged 41% to $174 million. With $1.4 billion in cash and investments according to financial reports, Zillow's balance sheet appears resilient, even as insiders cash in.

The Contradiction: What Does It Mean for Investors?

The contrast between insider selling and institutional buying is not uncommon in public markets. Insiders often sell for personal financial reasons, while institutions may target undervalued stocks with long-term potential. However, Zillow's case is nuanced. The company's Q3 performance-marked by a 24% adjusted EBITDA margin and $165 million in EBITDA-demonstrates operational efficiency. Yet, insiders' actions imply a lack of conviction in near-term upside.

For retail investors, the key question is whether institutional buying signals a buying opportunity. Zillow's institutional investors, including Glenview Capital Management, have added stakes in Q3 2025, suggesting confidence in its post-recession recovery. However, the stock's volatility-swinging between $70 and $90-reflects uncertainty about its growth trajectory.

Conclusion: A Calculated Bet

Zillow Group's Q4 2025 activity paints a mixed picture. While insiders have taken profits, institutions have deepened their commitments. For investors, this duality underscores the importance of balancing short-term signals with long-term fundamentals. Zillow's strong financials and institutional backing suggest it remains a viable long-term play, but the insider selling warrants caution. As always, due diligence is key-monitoring Q4 earnings and institutional activity in early 2026 could provide clearer direction.