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On Thursday, Citizens JMP Securities provided insights into the performance of Zillow (NASDAQ:Z) and CoStar Group (NASDAQ:CSGP), focusing on various operational metrics. CoStar Group, currently valued at $32.6 billion, has demonstrated strong revenue growth of 11.45% over the last twelve months. Analysts at the firm have maintained a positive outlook on Zillow’s prospects, particularly in the rental market, where the company is expected to increase its market share. Zillow’s robust traffic volume was highlighted as a significant advantage, as it attracts landlords and rental managers looking to reach a large audience.According to InvestingPro analysis, CoStar maintains a strong financial position with more cash than debt on its balance sheet, making it well-positioned for continued market expansion. Subscribers can access 12 additional exclusive ProTips and comprehensive financial metrics for deeper insight into CoStar’s performance.
Zillow’s strategy to unify its residential and rentals services through its Super App is anticipated to drive substantial growth in its multifamily segment. The company has also shown a consistent and stable advertising efficiency over time, which contrasts with CoStar Group’s performance. CoStar has seen a decline in advertising efficiency, attributed to aggressive spending to expand Homes.com.
Despite the competition, JMP Securities believes the multifamily space is sufficiently large to accommodate several successful entities. The ongoing debate over the leading player in this sector is expected to intensify in the upcoming quarters and years. Zillow’s Super App strategy is seen as a key factor in its ability to enhance monetization across its various business lines, including residential, multifamily, and mortgages.
Maintaining their Market Outperform rating, JMP Securities reaffirmed their price target of $92 for Zillow stock. This valuation is based on an enterprise value to estimated 2026 adjusted EBITDA multiple of approximately 25 times. The firm’s confidence in Zillow’s strategy is reflected in this target. For CoStar, current analyst targets range from $63 to $103, with the stock trading at notably high valuation multiples according to InvestingPro data. Get access to the complete Fair Value analysis and detailed Pro Research Report, available for over 1,400 US stocks, to make more informed investment decisions.
In contrast, CoStar Group also maintained its Market Outperform rating with a price target of $85. This target is similarly based on an enterprise value to estimated 2026 Commercial EBITDA multiple of about 25 times. While the company maintains impressive financial health with a current ratio of 8.96 and strong market position in the Real Estate Management & Development industry, the analysts noted that Homes.com has been exerting a negative impact on CoStar’s shares, which could be a concern for the company moving forward.
In other recent news, CoStar Group has reported substantial revenue projections, with analysts from JMP Securities maintaining a Market Outperform rating and a price target of $85.00. Deutsche Bank (ETR:DBKGn) also initiated coverage with a Buy rating and a slightly higher price target of $89.00. CoStar Group’s acquisition of Matterport (NASDAQ:MTTR), a leader in 3D digital twin technology, has been finalized, marking a significant step towards integrating AI-driven solutions in the real estate industry. The merger is expected to enhance property marketing and analytics, leveraging Matterport’s extensive spatial data library.
Furthermore, CoStar Group is expanding its workforce, particularly in its Richmond operations center, to support the growth of Homes.com and other platforms. This expansion includes hiring 500 new sales professionals and 100 market analysts, along with additional roles in AI and technology development. The company aims to complete its new global headquarters in Richmond by May 2026, accommodating around 3,500 employees. Despite these expansions, CoStar Group does not anticipate any impact on its financial guidance for 2025. These developments underscore CoStar Group’s strategic focus on innovation and growth in the real estate market.
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