Benchmark reiterated a Buy rating and $80 price target for Zillow Group on Monday, citing a sustained pattern of revenue and earnings beats over the past year. The firm’s analyst, Daniel Kurnos, noted that Zillow has exceeded quarterly guidance and trailing consensus on revenue and EBITDA since early 2023, with adjusted earnings per share of $0.52 in the second quarter surpassing the $0.45 estimate. Revenue rose 18% year-over-year to $772 million, above the $757.91 million consensus.
The stock, trading at $37.75, remains down 56% over the past 12 months and roughly half its September peak of $90.22. Zillow reported a net loss of $4 million, or -$0.02 per share, compared with a net income of $0.01 per share in the same period last year.
Other analysts took a more cautious stance. Bernstein downgraded Zillow to Market Perform from Outperform, citing concerns over revenue growth. Evercore ISI similarly lowered its rating to In Line from Outperform, pointing to a shift in monetization strategy and a softer outlook. Evercore ISI also projected third-quarter revenue growth of about 11% year-over-year, down from the 18% increase in Q2.
Zillow’s Residential and For Sale revenue grew between 7% and 14% year-over-year over the past four quarters, outpacing the roughly flat to low-single-digit growth in existing-home sales reported by the National Association of Realtors. Management has guided customer transaction share from 3% toward 6% in early 2024, though the firm now claims it has exceeded 10%. Analysts noted the metric’s reliability remains difficult to verify, distinguishing between true transaction share and increased wallet share.
