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Investing.com - Benchmark maintained its Buy rating and $95.00 price target on Zillow Group (NASDAQ:ZG) stock, which currently trades at $82.12 and has surged over 100% in the past year. The firm highlighted the company’s increased focus on new construction. According to InvestingPro data, the stock is trading near its 52-week high of $86.58.
The research firm noted that while new construction has always been part of Zillow’s portfolio, the renewed emphasis demonstrates the breadth of market segments the company serves in the real estate industry.
Benchmark identified two key developments in its analysis: Zillow raised its annual revenue guidance to mid-teens growth, and its Follow Up Boss platform now handles almost all connections in enhanced markets while gaining broader industry adoption.
Despite the housing market continuing to struggle, Benchmark remains confident in Zillow’s position due to what it describes as the company’s growing technological advantages and sustained growth momentum.
The firm maintains its positive long-term outlook on Zillow, viewing it as a likely winner in the real estate technology space unless competitors can meaningfully challenge its technological edge or growth trajectory.
In other recent news, Zillow Group reported second-quarter revenue of $655 million, surpassing analyst expectations of $647.65 million. This represented a 15% year-over-year growth, which significantly outpaced the residential real estate industry’s transaction value growth of 1-2% during the same period. The company also posted adjusted earnings per share of $0.40, slightly below the analyst consensus of $0.42. Adjusted EBITDA reached $155 million with a 24% margin, aligning with the high end of Zillow’s outlook range.
Following these results, Evercore ISI raised its price target for Zillow Group stock to $95, maintaining an Outperform rating, while Cantor Fitzgerald increased its target to $74, keeping a Neutral rating. Both firms acknowledged the strong performance in the second quarter, with Evercore ISI noting the company’s updated full-year revenue growth guidance from low-to-mid teens to mid-teens. Additionally, Zillow reported a 9% year-over-year growth in its For Sale revenue, alongside strong performance in the mortgage segment. These developments reflect a robust quarter for Zillow Group, despite some mixed results in earnings per share.
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