In a report released today, Daniel Kurnos from Benchmark Co. maintained a Buy rating on Zillow Group Inc (ZG), with a price target of $45. The company’s shares closed yesterday at $35.06.
Kurnos noted:
“We see PA growth returning to the low-double digits in 2020. Alternatively, the Homes business continues to expand at a much more rapid pace than expected, with the 1Q19 guide calling for 350-400 home sales at the average 4Q price vs. 141 homes sold in 4Q18. The upfront cost, however, for both Homes and mortgage remains significantly higher than anticipated – while Zillow’s 14 market target by 2019 will likely prove conservative, we wonder if, so too, will our $163 million EBITDA loss projection. The integrated vision makes sense, with capacity build on mortgage now a necessity for future implementation, but adding to our overall expectations that Homes + Mortgage EBITDA losses could run in the $150-$200 million range over the medium-term, noting that long-term Homes EBITDA economics of 2-300bps falls outside of the 3-5 year window.”
According to TipRanks.com, Kurnos is a 5-star analyst with an average return of 10.9% and a 55.5% success rate. Kurnos covers the Services sector, focusing on stocks such as Nexstar Media Group Inc, Sinclair Broadcast, and 1-800 Flowers.com.
Currently, the analyst consensus on Zillow Group Inc is a Hold with an average price target of $38.60.
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Based on Zillow Group Inc’s latest earnings release for the quarter ending September 30, the company reported a quarterly GAAP net loss of $492K. In comparison, last year the company had a GAAP net loss of $77.18 million.
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Zillow Group, Inc. engages in the provision of real estate and home-related information marketplaces on mobile and the web. Its brand portfolio is comprised of Zillow, Trulia, StreetEasy, HotPads, Naked Apartments, RealEstate.com, and OutEast.com. It also houses the business brands Mortech, dotloop, Bridge Interactive and New Home Feed.
