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On Monday, Zillow Group (NASDAQ:ZG) shares received an optimistic update from KeyBanc, with the firm’s analyst Sergio Segura upgrading the stock from Sector Weight to Overweight. The new price target set by KeyBanc is $100, indicating confidence in the company’s growth prospects. The stock, currently trading near its 52-week high of $83.67, has already delivered an impressive 84% return over the past six months. According to InvestingPro analysis, Zillow’s current market valuation appears to be on the higher side of its Fair Value range.
Segura’s analysis suggests that Zillow could surpass current Wall Street estimates without relying on an increase in existing home sales through the year 2026. This positive outlook is based on a detailed segment-by-segment revenue analysis conducted by KeyBanc. InvestingPro data reveals that 4 analysts have recently revised their earnings upwards, with the company expected to achieve profitability this year. Discover 10+ additional exclusive insights and comprehensive analysis with an InvestingPro subscription.
The analyst highlighted Zillow’s integrated application experience and its growing penetration in enhanced markets as key drivers for sustained mid-teens growth, even amidst a typically challenging real estate market. Segura believes these factors will contribute to Zillow’s continued success.
Furthermore, the potential for high incremental margins and Zillow’s disciplined investment approach are seen as indicators that the company may experience significant margin expansion moving forward. This assessment underpins KeyBanc’s decision to upgrade the stock rating and set a higher price target.
KeyBanc’s price target of $100 is based on a 24.0x multiple of Zillow’s expected 2026 enterprise value to EBITDA (EV/EBITDA), which reflects an expectation of the company’s value in relation to its earnings before interest, taxes, depreciation, and amortization.
In other recent news, Zillow Group received positive attention from multiple analyst firms. DA Davidson maintained a Buy rating on Zillow with an $80 target, following a review of the U.S. housing industry transaction data. The firm’s confidence in Zillow’s upcoming fourth-quarter earnings was bolstered by this favorable data. UBS also increased its price target for Zillow to $98 while maintaining a Buy rating, anticipating that the fourth quarter results will likely influence future earnings estimates positively. The revised forecast for fiscal year 2025 revenue and EBITDA is now slightly higher, at $2.56 billion and $686 million, respectively.
Bernstein analysts increased the price target for Zillow from $60 to $65, maintaining a Market Perform rating. They revised their valuation model based on Zillow’s better-than-expected EBITDA run-rate and reassessment of the company’s strategic execution. DA Davidson analysts raised the price target from $75 to $80, reaffirming a Buy rating, following the continued expansion of Zillow’s Showcase Listing service. RBC Capital Markets raised its price target for Zillow to $88 from $74, maintaining an Outperform rating on the stock, highlighting Zillow’s leading position in the digital real estate sector and potential improvements to Zillow’s platform leading to better monetization opportunities.
Zillow Group recently completed the redemption of its 1.375% Convertible Senior Notes due in 2026, issuing approximately 4.53 million shares of Class C capital stock to noteholders. Zillow has also been active in strategic initiatives to enhance its market presence, such as the acquisition of Virtual Staging AI and the expansion of its partnership with Realtor.com. These recent developments reflect Zillow’s ongoing efforts to refine its services and cater to the evolving needs of its users.
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