Zillow Group initiated with a Neutral at Baird

Baird last night initiated coverage of Zillow Group (ZG) with a Neutral rating and $88 price target The firm likes Zillow’s “clear marketplace leadership” in a potentially sizable market, with a category-leading brand and “historically sticky and cost-effective very high audience share.” However, Baird considers Zillow’s historical and current profitability including material stock-based comp expense “uninspiring.” Aggressive competitor spend and industry changes present risks, making the stock’s current valuation “as roughly balanced,” the analyst tells investors in a research note.