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Investing.com -- KeyBanc Capital Markets upgraded Zillow (NASDAQ:ZG) to Overweight with a $100 price target in a note to clients Monday, citing potential upside to Street estimates even if the real estate market remains sluggish.
The analysts see Zillow’s integrated app experience and growing presence in enhanced markets as key drivers of mid-teens revenue growth, despite ongoing challenges in existing home sales.
"We are upgrading Zillow from Sector Weight to Overweight with a $100 PT (24.0x 2026E EV/EBITDA)," analysts wrote. Their segment-by-segment revenue analysis suggests that Zillow could outperform expectations without relying on a housing market recovery.
The firm highlights Zillow’s high incremental margins and disciplined investment approach, which position the company for outsized margin expansion.
The analysts believe that the company’s integrated app experience will continue to boost user engagement and transaction volume, helping Zillow grow even in a historically weak real estate environment.
Zillow has faced market headwinds due to rising mortgage rates and low housing inventory, but KeyBanc sees the company’s strategic initiatives helping it navigate these challenges.
The firm points to Zillow’s continued investment in technology and platform improvements as a major advantage over competitors.
KeyBanc’s bullish stance on Zillow reflects confidence in the company’s ability to generate strong growth independent of broader market conditions. The firm’s valuation model, which prices Zillow at 24 times its projected 2026 EBITDA, underscores their expectation of strong earnings expansion.