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Investing.com - Citi has reiterated its Buy rating and $83.00 price target on Zillow Group (NASDAQ:ZG) following increased adoption of Zillow Showcase Listings (ZSLs) in June. The stock has shown strong momentum with a 51.5% return over the past year, though InvestingPro analysis suggests the shares are currently trading above their Fair Value.
According to Citi’s proprietary tracking data, Zillow saw incremental showcase listings increase by 8,400 (16% month-over-month) in June, with total ZSLs reaching approximately 19,400 (9% month-over-month growth).
The research firm tracked ZSLs across 50 states and more than 4,400 cities, with penetration of for-sale listings reaching mid-teens percentage in Apollo Beach, Florida and high single digits across multiple markets.
Based on an estimated average price of $500 per listing, Citi projects ZSL June revenue could have reached approximately $4.2 million and around $11 million for the second quarter, though the firm notes Zillow might be testing different price points to drive adoption.
Despite acknowledging challenges in the real estate market, Citi believes Zillow’s product investments in Enhanced Markets expansion, RT Touring, ZSLs, Rentals, and ZHL can deliver above-market growth.
In other recent news, Zillow Group’s first-quarter results showed a 2% revenue increase and a 10% EBITDA beat against Wall Street’s expectations, with significant growth in both the Rentals and Mortgages segments. However, the company’s second-quarter forecast fell slightly below analyst projections, with revenue and EBITDA forecasts missing the mark by 1% and 10% at the midpoint, respectively. Benchmark adjusted its price target for Zillow to $95 from $110, maintaining a Buy rating, while noting the company’s rental segment exceeded expectations with a 40% growth projection. JMP Securities initiated coverage on Zillow with a Market Outperform rating, citing the company’s extensive user base and strategic consolidation of Premier Agent partners as positive factors. Piper Sandler maintained an Overweight rating with an $82 target, highlighting Zillow’s strengthened balance sheet and potential for GAAP Net Income profitability. Meanwhile, Bernstein maintained a Market Perform rating with a $65 target, expressing confidence in Zillow’s market share gains in the Rentals sector. Cantor Fitzgerald kept a Neutral rating with a $60 target, pointing out that real estate market volatility may limit Zillow’s core residential growth in the near term.
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