Zillow Group Inc (ZG) Receives a Buy from SunTrust Robinson

SunTrust Robinson analyst Naved Khan maintained a Buy rating on Zillow Group Inc (ZG) today and set a price target of $56. The company’s shares closed last Monday at $31.97.

Khan said:

“We also believe that improvement in conversation rates (through better agent matching) can deliver additional monetization upside. Recovery is Relatively Quick Under Flex. We estimate ~4-7 month period for revenue break-even under Flex on average based upon a) median length of home search of ~10 wks, b) average closing time of 7-9 wks, and c) seasonality (see discussion on p.3-5; Ex 3,4,5). We believe that model should turn net accretive on revenue past the 6 month mark, on average. Despite the ST Hit to Profitability, LT Margins Should get a Boost from Flex. We estimate an incremental ~$50M upfront hit from elevated sales commission expenses, if Flex were to be rolled out broadly.”

According to TipRanks.com, Khan is a 5-star analyst with an average return of 17.8% and a 71.2% success rate. Khan covers the Technology sector, focusing on stocks such as Endurance International, Wix.com Ltd, and trivago NV.

Zillow Group Inc has an analyst consensus of Moderate Buy, with a price target consensus of $48.55, representing a 51.7% upside. In a report issued on September 4, Stephens also reiterated a Buy rating on the stock with a $57 price target.

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Based on Zillow Group Inc’s latest earnings release for the quarter ending June 30, the company reported a quarterly GAAP net loss of $71.98 million. In comparison, last year the company had a GAAP net loss of $3.09 million.

Based on the recent corporate insider activity of 16 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 ZG in relation to earlier this year.

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Zillow Group, Inc. engages in the provision of real estate and home-related information marketplaces on mobile and the web. The company operates through the following segments: Internet, Media & Technology (IMT), Homes and Mortgages segment.

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