Shares of Zillow Group jumped about 12% on Friday after the company outperformed 2Q earnings. The quarterly results prompted JMP Securities to increase the stock’s price target to $97 (22% upside potential) from $75 and reiterate a Buy rating.
JMP Securities analyst Ronald Josey said on Friday that Zillow (ZG) 2Q revenues surpassed Street estimates, while the company provided stronger-than-expected EBITDA margin guidance for the third quarter. In a research note to clients, Josey noted that the real estate database company “has rebounded from the initial impacts of COVID-19, while its Premier Agent business benefited as the broader housing market improved.”
On August 6, Zillow reported that 2Q revenues increased 28% to $768.4 million year-on-year, beating the Street consensus of $615 million. The company’s loss per share of $0.38 was also narrower than the Street estimates of $0.68.
The company’s CEO Rich Barton said that “Zillow’s second quarter results are even better than we had hoped, and firm up our belief that powerful tailwinds in both real estate and technology are rapidly converging, with Zillow at the nexus.”
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 9 Buys, 8 Holds, and 1 Sell. The average price target of $78.25 implies downside potential of about 2%. (See ZG stock analysis on TipRanks).