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Investing.com - Cantor Fitzgerald has maintained its Neutral rating and $74.00 price target on Zillow Group (NASDAQ:ZG) following the company’s third-quarter earnings report. The stock, which currently trades at $70.47, has shown significant volatility with a high beta of 2.11, aligning with an InvestingPro tip highlighting the stock’s price movements as quite volatile.
Zillow reported third-quarter results with revenue and EBITDA exceeding prior Street estimates by 1% and 4% respectively. The company’s For Sale revenue accelerated one percentage point to 10% year-over-year despite facing tougher comparisons, while its Rentals segment continued to show acceleration. This performance contributes to Zillow’s overall revenue growth of 15.31% over the last twelve months, reaching $2.39 billion.
The high end of Zillow’s fourth-quarter guidance suggests revenue acceleration to 18% with 340 basis points year-over-year EBITDA margin expansion, both figures surpassing previous Street estimates. The company expects For Sale revenue to remain stable around high single-digit percentage growth while Rentals continues to accelerate. Despite not being profitable over the last twelve months, analysts predict Zillow will be profitable this year with an EPS forecast of $1.69 for fiscal 2025, according to InvestingPro data.
Cantor Fitzgerald noted that Zillow is making good progress on key strategic and product initiatives, including tools for agents and sellers. However, the firm highlighted that the real estate market remains challenged, with Zillow management expecting the housing environment to continue to "bounce along the bottom" of the cycle through year-end. Despite these challenges, Zillow maintains a strong financial position with more cash than debt on its balance sheet and a healthy current ratio of 3.34, indicating solid short-term liquidity.
At 21 times FY26 estimated EBITDA, Cantor Fitzgerald views Zillow’s valuation as currently at a premium to its growth and profitability profile, supporting the maintained Neutral stance. This assessment aligns with InvestingPro’s analysis, which indicates the stock is currently overvalued compared to its Fair Value. Investors seeking deeper insights can access Zillow’s comprehensive Pro Research Report, one of 1,400+ detailed analyses available exclusively to subscribers that transform complex data into actionable investment intelligence.
In other recent news, Zillow Group reported third-quarter earnings that exceeded analyst expectations, with a notable 16% increase in revenue year-over-year. The company posted an adjusted earnings per share of $0.44, slightly above the analyst estimate of $0.43. Revenue for the quarter reached $676 million, surpassing the consensus estimate of $670.1 million and outperforming the broader real estate market’s growth. Following these results, Goldman Sachs raised its price target for Zillow to $78 from $74, while maintaining a Neutral rating. The firm noted that Zillow’s third-quarter EBITDA of $165 million exceeded both its own and consensus expectations. In contrast, UBS adjusted its price target for Zillow to $92 from $95, maintaining a Buy rating. UBS revised its fiscal year 2026 estimates, increasing revenue growth projections to 15.2% year-over-year but reducing EBITDA margin expectations. These developments highlight Zillow’s strong performance and the varying analyst perspectives on its future prospects.
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