Zillow Shares Drop on BofA’s Downgrade

Zillow Shares Drop on BofA’s Downgrade Jan. 10, 2024, 7:08 p.m., readers: 24

BofA Securities analysts downgraded Zillow Group (NASDAQ:ZG) from Buy to Neutral, adjusting the price target to $60.00 from the earlier $47.00. As a consequence, shares dropped nearly 2% today. The bank explained the downgrade by noting that the stock's current pricing seems to anticipate a steady housing market recovery in 2024, as indicated by its over 40% year-over-year increase. However, concerns arise from the near-record low home affordability, which could limit volume growth, even with lower rates. Additionally, ongoing real estate commission lawsuits present a challenge to Zillow Group’s buy-side agent lead generation segment, which accounts for nearly half of its revenue. While a Q4/23 beat is expected due to improved home volumes, and revenue forecasts for 2024 align with market expectations, there is a perceived risk to EBITDA.

About NASDAQ: ZG

Z illow Group, Inc., a digital real estate company, operates real estate brands on mobile applications and Websites in the United States. The company operates through three segments: Homes; Internet, Media & Technology;

Price: 42.70
Market cap: 10.1 billion USD
Eps: -0.68
P/e ratio: -62.79
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