In a report released yesterday, Curtis Nagle from Bank of America Securities reiterated a Hold rating on Zillow Group Class A (ZG – Research Report), with a price target of $70.00.
Curtis Nagle has given his Hold rating due to a combination of factors impacting Zillow Group Class A’s stock. While the company reported a strong performance in the first quarter with revenue and EBITDA figures surpassing market expectations, the outlook for the second quarter fell short of analyst projections. This mixed performance is further complicated by the challenging macroeconomic environment, which continues to exert pressure on the residential segment.
Despite these challenges, Zillow’s rental business shows promise, with management highlighting robust growth prospects driven by partnerships and increased market share. The rental segment’s resilience to macroeconomic fluctuations could contribute to more stable long-term growth. However, the overall cautious stance is maintained due to elevated interest rates and subdued housing volumes, which are expected to limit significant positive adjustments in estimates or valuation multiples in the near term.
Nagle covers the Consumer Cyclical sector, focusing on stocks such as Wayfair, ACV Auctions, and Etsy. According to TipRanks, Nagle has an average return of -3.0% and a 48.43% success rate on recommended stocks.