Optimistic Buy Recommendation for Zillow Group Class C Driven by Strong Revenue Growth and Positive Financial Outlook

Analyst John Colantuoni from Jefferies maintained a Buy rating on Zillow Group Class C (Z – Research Report) and increased the price target to $110.00 from $105.00.

John Colantuoni has given his Buy rating due to a combination of factors concerning Zillow Group Class C’s recent performance and future outlook. Zillow’s fourth quarter results showed strong revenue growth across multiple segments, with a total of $554M, slightly surpassing consensus expectations. The company demonstrated significant year-over-year growth in Mortgage Revenue, outperforming expectations by 12%, which reflects the positive momentum of Zillow Home Loans. Additionally, the Rentals segment showed robust growth, and the company is expected to maintain this trajectory with a 30% increase anticipated for the next quarter.
Looking ahead, Zillow has provided guidance indicating sustained revenue growth and improved EBITDA margins, suggesting a positive financial outlook for fiscal year 2025. The company plans to continue expanding its EBITDA margin and anticipates achieving positive GAAP Net Income. Despite challenges in the broader housing market, Zillow’s guidance reflects confidence in its ability to outperform, particularly in Residential Revenue, and capitalize on its strategic initiatives. These factors collectively underpin Colantuoni’s optimistic view of Zillow’s potential to deliver value to investors, justifying the Buy recommendation.

In another report released yesterday, J.P. Morgan also reiterated a Buy rating on the stock with a $93.00 price target.

Based on the recent corporate insider activity of 103 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.