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Investing.com - Bernstein SocGen Group has reiterated an Outperform rating and $105.00 price target on Zillow Group (NASDAQ:ZG), currently trading at $74.27 with a market capitalization of $18.5 billion, according to a research note released Monday.
The firm noted that recent lawsuits and negative headlines have overshadowed improvements in interest rates and housing market activity, as well as the company’s execution of its growth strategy, which has delivered 15.3% revenue growth over the last twelve months. InvestingPro data shows the company maintains a healthy balance sheet with more cash than debt.
Bernstein indicated the upcoming quarterly earnings report represents an opportunity for Zillow’s management to redirect focus to the company’s fundamentals and its positive idiosyncratic story.
The research firm suggested management could use the earnings call to reassure investors that the ongoing lawsuits will not pose existential risks or become major distractions for the company.
Bernstein recommended buying Zillow stock after the earnings report, citing potential nuances in market share within the Residential business for Q3 that could appear stronger heading into Q4 and Q1. According to InvestingPro’s Fair Value analysis, the stock appears overvalued at current levels, though analysts maintain targets ranging from $66 to $105.
In other recent news, Zillow Group is navigating multiple legal challenges while maintaining strong support from analysts. The company is facing lawsuits from competitors Compass and CoStar, as well as an antitrust case from the Federal Trade Commission (FTC) concerning its February 2025 acquisition of Redfin’s rental business. Despite these legal hurdles, analysts from Benchmark and DA Davidson have reiterated their Buy ratings, each with a $95 price target. Benchmark believes Zillow has an edge in most lawsuits, though outcomes remain uncertain.
Mizuho has initiated coverage on Zillow with an Outperform rating and a $100 price target, citing the company as a "product-driven growth story." Meanwhile, JMP Securities has reiterated its Market Outperform rating with an $87 price target, viewing recent stock pullbacks as a buying opportunity. The FTC alleges that Zillow paid Redfin $100 million to eliminate competition in the rental housing advertising market. Attorneys general from five states have filed similar antitrust lawsuits, adding to the company’s legal challenges. Despite these issues, analysts generally maintain a positive outlook on Zillow’s prospects.
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