Barclays says Homes.com worries overblown for Zillow

Barclays analyst Trevor Young says Zillow Group’s (ZG) “moat remains intact for now” amid competition from Homes.com. The firm says Homes.com has made initial progress in ramping traffic, and that higher app sessions than Zillow points to some habituation. However, it thinks Zillow has a substantial advantage versus Homes.com in terms of brand awareness. Some of the competitive pressure worries are overblown, contends Barclays. Nonetheless, the analyst still sees numerous reasons to be cautious on Zillow shares, including an unclear recovery path for residential real estate as buyers contend with significantly higher mortgage rates, an overcapacity of agents industry-wide, and a changing regulatory backdrop. It keeps an Underweight rating no Zillow with a $35 price target.