Zillow Group: Balanced Outlook with Hold Rating Amid Growth and Market Caution

William Blair analyst Stephen Sheldon has maintained their neutral stance on Z stock, giving a Hold rating on May 6.

Stephen Sheldon has given his Hold rating due to a combination of factors surrounding Zillow Group’s financial performance and future outlook. The company’s revenues and gross profit have shown growth, surpassing estimates slightly, which indicates a positive trend. However, the guidance provided by management for the upcoming quarter was somewhat below expectations, suggesting cautious optimism about near-term market conditions.
Despite the positive growth in areas such as rentals, which is expected to continue, there are concerns about the overall housing market not improving significantly in the short term. Additionally, while there is an expectation of profitability on a GAAP basis by the end of 2025, the current trading multiples of Zillow’s stock, such as its EBITDA multiple, suggest that the stock is fairly valued at present. These factors combined lead to a Hold rating, reflecting a balanced view of potential risks and rewards.

In another report released on May 6, KBW also maintained a Hold rating on the stock with a $76.00 price target.