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On Wednesday, BofA Securities analyst Nat Schindler increased the price target on Zillow Group (NASDAQ:ZG) shares to $84 from $81, while keeping a Neutral rating on the stock. The adjustment followed Zillow’s fourth-quarter earnings, which slightly exceeded Wall Street’s expectations. The company reported fourth-quarter revenue and EBITDA of $554 million and $112 million, marginally surpassing the anticipated $548 million and $109 million. InvestingPro data shows the stock has gained over 70% in the past six months, with six analysts recently revising their earnings estimates upward.
Zillow’s residential segment revenue rose 11% year over year to $387 million during the quarter, topping estimates of $384 million. Its Rentals and Mortgage segments performed as expected and better than projected, with revenues of $116 million and $41 million, against the Street’s forecast of $116 million and $37 million, respectively. The company maintains impressive operational efficiency with a gross profit margin of 76.44% and a healthy current ratio of 3.13, according to InvestingPro data.
Looking ahead to the first quarter, Zillow provided a revenue guidance of $575 million to $590 million and an EBITDA projection of $125 million to $140 million. These figures fell short of analysts’ expectations, which were set at $600 million for revenue and $158 million for EBITDA. Zillow anticipates that residential revenue will grow in the low to mid-single digits, contrasting with a flat year-over-year broader real estate market. The company also noted that rate volatility has been affecting agent spending, which in turn limits near-term market share performance. Despite near-term challenges, InvestingPro analysis indicates net income growth is expected this year, with analyst targets ranging from $50 to $110 per share. For deeper insights into Zillow’s valuation and growth prospects, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Zillow Group has been a focal point for several analysts. KeyBanc Capital Markets reduced its price target for Zillow to $95, maintaining an Overweight rating, despite the company’s Q4 earnings not meeting their expectations. Meanwhile, Citi analyst Ronald Josey increased Zillow’s price target to $98, citing revenue growth in the For Sale and Rentals segments, and successful product initiatives. Cantor Fitzgerald also raised its price target for Zillow from $62 to $70, following a strong Q4 performance that exceeded analyst expectations.
UBS analyst Chris Kuntarich reaffirmed a Buy rating on Zillow shares with a steady price target of $98, noting a slight increase in revenue estimates for fiscal year 2025. Kuntarich also mentioned a marginal reduction in margin expectations to 26.1%. Benchmark analyst Daniel Kurnos increased Zillow’s price target to $100, maintaining a Buy rating on the stock, expressing optimism about Zillow’s performance in 2025.
These developments reflect the recent adjustments in analyst expectations and projections for Zillow Group, highlighting the company’s performance and strategic positioning in the real estate market.
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