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On Thursday, Piper Sandler showed confidence in Zillow Group (NASDAQ:ZG), a company currently valued at $16.3 billion, by increasing the price target for the company’s shares to $82 from $80, while maintaining an Overweight rating. The adjustment followed Zillow’s first-quarter results, which aligned with expectations, featuring revenues that were 2% higher than anticipated and EBITDA surpassing forecasts by 8%. According to InvestingPro data, analyst targets for the stock range from $60 to $110, reflecting mixed sentiment in the market.
Zillow’s performance comes amid a subdued housing market, yet the company has been proactive in executing its product initiatives, reducing debt, repurchasing shares, and is on track to achieve GAAP net income profitability by the end of the year. The Rentals segment was highlighted as a particularly strong area, with the prospect of a normalized housing market on the horizon. InvestingPro analysis shows the company maintains strong financial health with a current ratio of 2.81 and more cash than debt on its balance sheet. Get access to 8 more exclusive InvestingPro Tips and comprehensive financial analysis through the Pro Research Report.
Analysts at Piper Sandler noted that they had reduced their estimates before the first-quarter report due to concerns about early April home purchase activity. Despite these concerns, Zillow’s guidance suggests a mid-single-digit growth in Residential revenue for the second quarter. The firm commended Zillow for its effective cost control and execution on product initiatives.
Following the first-quarter report and with updated projections for improved Rentals growth, Piper Sandler’s revenue estimates for Zillow in 2025 and 2026 have increased by 1.5% and 4%, respectively, with EBITDA projected to rise by 3% and 6%. The revised price target reflects these updated expectations and the firm’s continued Overweight rating on Zillow stock. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its calculated Fair Value, with a strong revenue growth of 15% over the last twelve months.
In other recent news, Zillow Group has garnered attention from several analyst firms, each maintaining a positive outlook on the company’s stock. KeyBanc reiterated its Overweight rating with an $85 price target, projecting strong first-quarter results for Zillow that could surpass guidance and consensus estimates. KeyBanc’s analysts also noted minimal adjustments to their 2025 revenue estimates, reflecting confidence in Zillow’s growth initiatives. JMP Securities maintained a Market Outperform rating with a $92 price target, despite a recent decline in Zillow’s stock following a weaker-than-expected outlook for the first quarter of 2025. The firm emphasized Zillow’s potential for valuation multiple expansion and its robust position in navigating a volatile market.
Additionally, RBC Capital Markets upheld its Outperform rating and $88 price target, focusing on Zillow’s potential for consistent, above-market growth due to enhanced market strategies. Piper Sandler also reaffirmed its Overweight rating with a $90 price target, highlighting a 67% year-over-year increase in Zillow’s fourth-quarter Flex (NASDAQ:FLEX) revenue and the company’s expanding market share. The firm remains optimistic about Zillow’s future, citing new product introductions and ongoing market expansion plans. Despite macroeconomic challenges and ongoing litigation, these analyses collectively underscore a steady vote of confidence in Zillow’s strategy and market position.
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