Benchmark reiterated a Buy rating and $80 price target for Zillow Group (NASDAQ: ZG) on Monday, citing the company’s pattern of surpassing revenue expectations in virtually every quarter since early 2023.
The rating comes as Zillow’s shares trade at $37.75, down 56% from a 52-week high of $90.22. Benchmark’s price target implies a potential upside of roughly 112% from current levels. The firm’s analyst, Daniel Kurnos, highlighted Zillow’s ability to exceed quarterly revenue and EBITDA consensus estimates consistently over the trailing four quarters.
Residential and sales revenue grew between 7% and 14% year-over-year in the same period, while existing home sales tracked by the National Association of Realtors showed flat to low single-digit growth. Management’s customer transaction share metric, initially projected at 3% to 6% in early 2024, was later reported to have surpassed 10%.
Zillow reported adjusted earnings per share of $0.52 for the second quarter, beating the $0.45 estimate, alongside revenue of $772 million, an 18% year-over-year increase that exceeded the consensus forecast of $757.91 million. The company posted a net loss of $4 million, or -$0.02 per share, compared with net income of $0.01 per share in the prior-year period.
Evercore ISI reduced its outlook, projecting third-quarter revenue growth of about 11% year-over-year. Bernstein downgraded Zillow from Outperform to Market Perform, while Evercore ISI shifted its rating from Outperform to In Line. InvestingPro data reflects the stock’s decline from its 52-week peak.
