Zillow Group Shares Rise on Analyst Upgrade
Shares of digital real estate stocks were seen trading higher on Tuesday after Piper Sandler analysts upgraded Zillow Group (ZG:US).
Analysts cited continued market share gains by Zillow’s Premier Agent app, product optionality, and new initiatives, as well as bottoming in the housing macro as key drivers fueling the upgrade.
Moreover, FY24 analyst consensus for Zillow look “conservative”, which prompted Piper Sandler analysts to hike revenue estimates by 2% and EBITDA by 14%.
The new price target on ZG stock is $62 per share, which offers about 20% upside potential compared to today’s price action ($51.46 at the time of writing).
Back in May, Zillow said its revenue fell by almost 90% in the first quarter of 2023 as the company lapped excellent results it recorded in Q1 of 2022. Zillow generated $469 million in Q1 net sales, ahead of the $425 million consensus.
The company also reported a profit per share of $0.35, crushing analyst expectations for earnings of $0.11. As a result, Zillow stock gained following the earnings report.
“This outperformance is due to a combination of the work we’ve done since reorienting the company in early 2022 and favorable relative tailwinds in a tough housing environment. The numerous incremental changes we have made are adding up to make an impact on our business,” Chief Executive Rich Barton and Chief Financial Officer Allen Parker said in a letter to shareholders.
About two weeks before the company reported its Q1 results, Congressman Daniel Goldman reported he had bought $15,000 - $50,000 worth of ZG stock back in March.
