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Investing.com - KeyBanc maintained its Overweight rating and $92.00 price target on Zillow Group (NASDAQ:ZG) on Monday, citing expectations for third-quarter results to exceed market estimates. According to InvestingPro data, Zillow’s earnings are due on October 30, with analysts’ price targets ranging from $66 to $105.
The investment firm attributed the anticipated outperformance to acceleration in industry transaction growth, which should drive upside for the real estate marketplace company’s quarterly results. The company has shown promising signs, with revenue growing 15.3% over the last twelve months and maintaining a healthy gross profit margin of 76%.
Despite the positive outlook for the third quarter, KeyBanc expects Zillow to provide conservative guidance for the fourth quarter, reflecting ongoing challenges in the housing market.
The firm acknowledged some growing concerns related to competition and lawsuits facing Zillow but remained confident in the company’s market position.
KeyBanc projects Zillow will deliver mid-teens revenue growth and mid-20% EBITDA growth, supported by market share gains, improving real estate conditions, and high incremental margins.
In other recent news, Zillow Group’s financial and legal landscape has been under the spotlight. The company is currently facing multiple legal challenges, including lawsuits from competitors Compass and CoStar, and an antitrust case from the Federal Trade Commission (FTC) concerning its rental agreement with Redfin. The FTC alleges that Zillow paid Redfin $100 million to eliminate it as a competitor in the rental housing advertising market. Despite these challenges, several analysts have reiterated positive ratings for Zillow. Bernstein maintains an Outperform rating with a $105 price target, emphasizing the company’s growth strategy and market conditions. Benchmark and DA Davidson both reaffirmed their Buy ratings with a $95 price target, expressing confidence in Zillow’s legal standing despite the ongoing cases. Additionally, Mizuho has initiated coverage on Zillow with an Outperform rating and a $100 price target, citing the company’s strong performance amid tough housing market conditions. These developments highlight the complex environment Zillow is navigating, balancing legal challenges with strategic growth initiatives.
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