Benchmark raises Zillow stock price target to $100, maintains buy rating

On Wednesday, Benchmark analyst Daniel Kurnos increased Zillow Group’s (NASDAQ:ZG) price target to $100 from the previous $80 while maintaining a "Buy" rating on the stock. Currently trading at $82.69, Zillow has shown remarkable momentum with a 96% surge over the past six months. According to InvestingPro analysis, the stock appears to be trading above its Fair Value, with analyst targets ranging from $50 to $110. Kurnos highlighted Zillow’s share price recovery amidst a stagnant housing market and ongoing industry uncertainties stemming from a Department of Justice settlement. Despite these challenges, he noted that the company’s fundamentals have been the main focus for investors.

Kurnos expressed optimism about Zillow’s performance, suggesting that the 2025 consensus estimates are well-aligned with expectations and that the year might start stronger than anticipated. The company’s revenue grew by 13.12% in the last twelve months, with a healthy gross profit margin of 76.44%. This outlook is particularly noteworthy given Zillow’s history of conservative forward guidance. The analyst’s update reflects confidence in Zillow’s ability to manage mid-cycle margins and earnings effectively, supported by strong liquidity with a current ratio of 3.13.

The analyst also pointed out that while there is concern over the current level of investor enthusiasm for Zillow, as long as the company continues to demonstrate growth in revenue per transaction and benefits from the rental market, the shares are expected to rise gradually. Kurnos did caution about potential risks such as tariffs, particularly on lumber, and the possibility of reinflationary interest rates affecting the total number of transactions. However, he believes that Zillow’s progress will likely support a continued upward trend in its stock value.

The update from Benchmark comes as Zillow navigates a complex real estate environment, characterized by external pressures that could influence transaction volumes. Despite these factors, the firm’s maintained "Buy" rating and increased price target suggest a positive outlook for Zillow’s financial performance and stock trajectory in the near term. InvestingPro subscribers have access to 14 additional investment tips for Zillow, along with comprehensive financial metrics and expert analysis in the Pro Research Report, helping investors make more informed decisions in this dynamic market environment.

In other recent news, Zillow Group has seen a series of analyst upgrades and target price adjustments. KeyBanc has raised Zillow’s stock rating to Overweight, setting a new target price of $100. The upgrade comes on the back of a detailed revenue analysis conducted by KeyBanc, pointing towards Zillow’s potential for sustained growth and significant margin expansion.

Simultaneously, DA Davidson has maintained a Buy rating on Zillow with an $80 target. The firm’s confidence in Zillow’s performance is bolstered by the U.S. housing industry transaction data for December, suggesting a favorable environment for Zillow’s operations.

UBS also revised its price target for Zillow to $98, while keeping a Buy rating. The firm’s revised forecast for fiscal year 2025 revenue and EBITDA is slightly higher than previous estimates, indicating potential for growth.

Furthermore, Bernstein analysts increased the price target for Zillow from $60 to $65, maintaining a Market Perform rating. The adjustment reflects improved EBITDA forecasts and growing confidence in Zillow’s strategic direction and growth potential.

In other developments, Zillow saw a 6.7% increase amidst a surge in real estate-related stocks following the latest inflation data. This rise reflects a more optimistic outlook for the industry.

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