Zillow Group (ZG) stock plummeted by 17.95% in pre-market trading on Wednesday, following the online real estate company's weaker-than-expected revenue guidance for the first quarter.

Although Zillow reported fourth-quarter adjusted EBITDA and revenue that beat Wall Street expectations, the company's outlook for the first quarter fell short of analysts' estimates.

For Q1, Zillow forecasted adjusted EBITDA in the range of $125 million to $140 million, lower than the consensus estimate of $158 million. Additionally, the company projected revenue of $575 million to $590 million, missing the expected $600 million.

During the Q4 earnings call, Zillow provided details on its strategy and future growth plans. The company aims to expand its Enhanced Markets experience to over 35% of connections by the end of 2025, up from 21% in Q4 2024. Zillow also sees a clear path to a $1 billion+ Rentals business opportunity in the future.

However, Zillow expects the housing market to remain subdued in 2025, with the company forecasting low to mid-single-digit industry growth for the year. This muted outlook, coupled with the disappointing Q1 guidance, appears to have weighed heavily on investor sentiment, leading to the significant pre-market sell-off.