Zillow Stock Target Raised, Outlook Rating Overweight By Investing.com

On Friday, Piper Sandler adjusted its outlook on Zillow Group (NASDAQ:) shares, raising its price target from $73.00 to $93.00 but maintaining an Overweight rating on the shares. The stock has shown remarkable momentum, returning ~88% over the past six months and is currently trading near its 52-week high of $83.67.

According to InvestingPro analysis, the stock appears to be overvalued at current levels. The company’s positive stance comes from a thorough review of management discussions and industry data, which suggest better prospects for the company’s mortgage and residential real estate revenue growth in the coming years.

The optimism is supported by Zillow’s solid financial position. InvestingPro’s data shows a healthy current ratio of 3.13 and more cash than debt on the balance sheet.

Based on the new information, the Piper Sandler analyst has revised upwards the sales and EBITDA forecasts for 2025 and 2026. According to the company, Zillow’s mortgage revenue is expected to grow 19% in 2025 and a significant 42% in 2026. Additionally, residential real estate revenue is expected to grow by a mid-teens percentage in both years.

As a result of these adjustments, Zillow’s overall revenue forecast has increased 2% in 2025, with an increase of approximately 5% forecast for 2026. The EBITDA estimate for 2026 was adjusted upwards by a similar amount. The revised forecasts have resulted in an increase in the discounted cash flow (DCF)-based price target from $73.00 to $93.00.

Piper Sandler continues to support Zillow as a compelling investment and highlights the company as a product-led growth story. The company expects an improving margin and profitability profile for Zillow, supporting the increased price target and positive valuation.

With a gross profit margin of 76.4% and analysts predicting profitability this year, Zillow shows promising potential. Discover 12 more exclusive insights and detailed financial analysis in the comprehensive Pro Research Report, available on InvestingPro.

In other recent news, Zillow Group reported robust third-quarter performance, with revenue increasing 17% year-over-year to $581 million. This growth was primarily driven by a 63% increase in mortgage revenue totaling $39 million.

Despite a net loss of $20 million, the company demonstrated effective cost management and achieved EBITDA of $127 million. For the fourth quarter, Zillow forecasts a 12% year-over-year increase in revenue and expects a profit of between $525 million and $540 million.

The real estate technology company has also experienced significant developments in its corporate structure. Jun Choo has been promoted to chief operating officer and will oversee Zillow’s sales strategy and operations. This leadership change follows the departures of Susan Daimler (OTC:) and Matt Daimler, President of Zillow and Senior Vice President of Product, respectively.

Analyst firms have shown confidence in Zillow’s growth potential. Canaccord Genuity raised its stock price target on Zillow from $64 to $86 and maintained a Hold rating. Similarly, Piper Sandler reiterated its “Overweight” rating on Zillow shares and maintained a $73.00 price target.

To strengthen its position in the real estate industry, Zillow has expanded its market presence through strategic initiatives. This includes the acquisition of Virtual Staging AI and the expansion of the partnership with Realtor.com. These recent developments underscore Zillow’s commitment to improving its product offerings and operational efficiency.

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