Shares of Zillow Group, Inc. (NASDAQ: ZG) dipped following the company’s recent report that delivered mixed results. In the fourth quarter, the company reported an adjusted EPS of 27 cents, slightly below the consensus of 28 cents. However, Zillow’s sales of $554 million surpassed the estimated $545.9 million. Looking ahead, the company anticipates first-quarter sales to range between $575 million and $590 million, falling short of the $600.9 million estimate.
Zillow projects revenue growth in the low to mid-teens by 2025, alongside ongoing margin expansion and full-year GAAP profitability. Analysts reacted to these results by adjusting their price forecasts for the stock. Piper Sandler’s Thomas Champion lowered the price target from $93 to $90, maintaining an Overweight rating. Champion viewed the company’s performance positively but noted a more conservative outlook for 2025 with an expected 11% revenue growth versus 17% in the previous quarter.
On the other hand, Cantor’s Deepak Mathivanan upgraded the price target from $62 to $70 while retaining a Neutral rating. Despite Zillow exceeding revenue and EBITDA expectations, its first-quarter guidance was slightly below projections. Mathivanan emphasized the company’s plans to expand into new markets and invest in various segments.
JP Morgan’s Dae K Lee remained optimistic, reiterating an Overweight rating and a $93 price forecast. Lee acknowledged the market’s reaction to Zillow’s results but emphasized the company’s strong performance in rentals and partnerships, setting a positive trajectory for 2025. Stephens’ John Campbell also maintained an Overweight rating, with a price target of $73. Campbell highlighted Zillow’s resilience amid market fluctuations, noting that the company’s full-year revenue outlook aligns with expectations.
RBC Capital Markets’ Brad Erickson, with an Outperform rating and a $88 price target, expressed confidence in Zillow’s growth potential despite challenges in the housing market. Erickson emphasized the company’s strategic initiatives that could lead to significant revenue and profit growth in the coming years.
The analyst notes that the company’s recent performance fell short of industry expectations, which has led to a more cautious stance on its short-term prospects. Despite concerns over a loss in residential market share during the fourth quarter, the analyst maintains a positive outlook for the company’s long-term growth trajectory, driven by its refined market strategy. Erickson has revised upward the revenue estimates for 2025, albeit with a slight adjustment downward in EBITDA estimates. The focus is now shifting towards the targets set for 2026. The latest check on Wednesday revealed that ZG shares had dropped by 9.40% to $75.96. Analysts highlight Zillow’s successful execution of its one-stop strategy, which has resulted in gains across its rental and mortgage businesses. The article also provides insights from various analyst ratings on ZG stock, indicating a range of perspectives from different firms. Overall, the article on Zillow’s recent performance suggests a mixed quarter with positive execution but some caution regarding future guidance. The information was sourced from Benzinga.com, a platform that offers stock market analysis and insights to investors.
