11:14 AM EST, 03/05/2024 (MT Newswires) -- Zillow Group ( ZG ) shares face up to a 40% to 60% long-term downside risk amid concerns about its core business model, growth prospects, regulatory challenges and earnings quality, short-seller Spruce Point Capital Management said Tuesday.

Spruce Point said the business model of real estate marketplace provider Zillow ( ZG ) has come "under pressure from declining web traffic and growing industry litigation and regulatory risks that are poised to disrupt the real estate commission structure."

Zillow's ( ZG ) core market-based pricing business "will continue to be pressured given its maturity and saturation," Spruce Point said.

Zillow ( ZG ) did not immediately reply to MT Newswires' request for comment.

Zillow ( ZG ) shares fell 3.2% in recent Tuesday trading.

Price: 55.50, Change: -1.84, Percent Change: -3.21