Dae Lee, an analyst from J.P. Morgan, reiterated the Buy rating on Zillow Group Class C. The associated price target remains the same with $94.00.
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Dae Lee has given his Buy rating due to a combination of factors that highlight Zillow Group’s strong position and growth potential in the rental market. Despite the recent FTC lawsuit against Zillow and Redfin concerning an alleged anti-competitive agreement, Lee believes that the legal proceedings will take a considerable amount of time to resolve, and the financial outcomes are currently uncertain. However, Zillow’s rental segment has shown significant momentum, with a notable increase in revenue prior to the partnership with Redfin, suggesting that the core business remains robust.
Dae Lee emphasizes that Zillow’s Rentals revenue has been a substantial contributor to the company’s overall financial performance, with projections indicating continued growth. The partnership with Redfin, although under scrutiny, has positioned Zillow as a key player in the multifamily rental listings market. This strategic positioning, coupled with the expected revenue growth, supports the long-term investment thesis, justifying the Buy rating and the maintained price target of $94.
Based on the recent corporate insider activity of 125 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of Z in relation to earlier this year.