On Friday, Citi expressed a positive stance on Zillow Group (NASDAQ:ZG), maintaining a Buy rating and a $58.00 price target for the company's stock. The optimism is based on the potential growth from Zillow's latest offerings, including Enhanced Markets, RT Touring, and Showcase Listings, which are expected to contribute to a larger transaction share.
The firm's confidence follows recent meetings with Zillow's CFO, Jeremy Hofmann, and VP of Strategic Affairs & IR, Bradley Berning. The discussions touched on several key topics such as the National Association of Realtors (NAR) settlement, the roll-out of Enhanced Markets, the opportunities presented by Zillow Showcase, previously known as Showcase Listings, and the company's focus on increased profitability.
Citi's proprietary tracking indicates that Zillow Showcase Listings have seen a significant increase, with a 12% month-over-month rise in April, reaching approximately 3,300 listings. This growth is attributed to higher penetration rates and the adoption of these listings is accelerating.
InvestingPro Insights
As Zillow Group (NASDAQ:ZG) continues to innovate with offerings like Enhanced Markets and RT Touring, the company's financial health and market performance provide key insights for investors. According to InvestingPro data, Zillow has a market capitalization of $10.52 billion and has demonstrated a revenue growth of 6.03% over the last twelve months as of Q1 2024. Notably, the company's gross profit margin stands at an impressive 77.46% in the same period. Despite a negative P/E ratio of -65.76, indicating that the company is not currently profitable, Zillow holds more cash than debt on its balance sheet, and analysts predict the company will be profitable this year.
Investors should note that Zillow's stock price movements have been quite volatile, with a 3-month price total return of -16.76%, yet there has been a recent uptick with a 1-week price total return of 5.05%. Management's aggressive share buybacks and the fact that liquid assets exceed short-term obligations are important factors to consider. Moreover, there are additional InvestingPro Tips available that could provide further insights into Zillow's performance and outlook. For those interested in a deeper dive, using the coupon code PRONEWS24 will grant an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering access to a comprehensive set of tips and analytics.
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