Zillow Group Class A (ZG) has received a new Buy rating, initiated by Mizuho Securities analyst, Wei Fang.
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Wei Fang has given his Buy rating due to a combination of factors that highlight Zillow Group’s potential for growth and resilience in a challenging housing market. Zillow is positioned as a product-driven growth story, with the ability to capitalize on improvements in the housing market. Despite a stagnant environment for existing home sales, the company has managed to achieve significant top-line growth, driven by its mortgage and rental segments, which are expected to continue expanding.
Zillow’s strategic initiatives, such as the Enhanced Market Strategy, are effectively converting web traffic into monetizable actions, boosting revenue from various streams including home financing and closing services. The company’s rental advertising business is also projected to grow substantially, contributing to a higher-margin revenue mix. With above-consensus revenue and EBITDA estimates for the coming years, Fang sees Zillow’s multi-faceted growth approach as a strong foundation for future share price appreciation, justifying the Buy rating.
In another report released on September 25, Citizens JMP also reiterated a Buy rating on the stock with a $87.00 price target.