In a report released today, Nikhil Devnani from Bernstein upgraded Zillow Group Class A to a Buy, with a price target of $105.00.
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Nikhil Devnani has given his Buy rating due to a combination of factors that highlight Zillow Group’s potential for growth and improved financial performance. A key reason for the positive outlook is Zillow’s recent execution on achieving mid-teens revenue growth, which is complemented by the emergence of new business segments such as Rentals and Showcase. Additionally, the company’s earnings quality is expected to improve, with GAAP EBIT poised for an upward trend, and there is a possibility of interest rates declining, which could further benefit the company.
Furthermore, Zillow’s strategy to enhance conversion rates and average revenue per user (ARPU) is showing promise, with consistent share gains in the residential sector. The transition to the Flex model and the introduction of new tools for consumers and agents are expected to drive further growth. The Rentals segment is particularly compelling, with expectations of exceeding $1 billion in revenue by 2028. Overall, these factors, along with the potential for operating leverage to surprise positively in the coming years, underpin Devnani’s optimistic Buy rating for Zillow Group Class A stock.
According to TipRanks, Devnani is a 5-star analyst with an average return of 25.4% and a 78.13% success rate. Devnani covers the Consumer Cyclical sector, focusing on stocks such as DoorDash, Maplebear, and eBay.
In another report released on September 7, RBC Capital also maintained a Buy rating on the stock with a $95.00 price target.