Zillow Group Inc. (Z) experienced a sharp sell-off on Wednesday, with its stock plummeting over 15% in pre-market trading. The real estate technology company's shares took a hit after it reported mixed fourth-quarter earnings and provided a disappointing outlook for the first quarter of 2025, citing challenges in the softening housing market.

Despite beating revenue expectations for Q4 2024, Zillow's non-GAAP earnings per share fell short of analyst estimates. More concerning for investors was the company's weak guidance for Q1 2025, with projected revenue between $575 million and $590 million, missing Wall Street's expectations of around $600 million.

The housing market's slowdown, characterized by high mortgage rates and dampened home sales, has weighed heavily on Zillow's performance. As buyers and sellers become increasingly cautious, the demand for the company's services has been impacted, leading to concerns about its future growth potential.

However, Zillow's CEO, Jeremy Wacksman, expressed confidence in the company's strategy and its ability to navigate the challenging market conditions. During the earnings call, he highlighted Zillow's efforts to expand its offerings, such as the Enhanced Markets experience, Zillow Showcase, and Zillow Home Loans, positioning the company for sustainable growth and profitability.

Analysts, while acknowledging Zillow's strong revenue growth, remain cautious about the company's prospects in the short term. BTIG analyst Jake Fuller maintained a "Hold" rating on Zillow's stock, citing underperformance and uncertainty surrounding the housing market.