Bernstein raises Zillow Group stock price target to $75 on share gains

Bernstein has raised its price target for Zillow Group (ZG) to $75 from $65, while maintaining a Market Perform rating, ahead of the company's Q2 2025 earnings report. The target increase primarily reflects a model roll-forward, with Bernstein anticipating an in-line Q2 performance due to broader housing weakness, though highlighting Rentals and Mortgage as potential bright spots. Despite a slightly reduced revenue outlook, analysts broadly expect Zillow to achieve profitability in FY2025, with market attention shifting towards potential share gains in the second half of the year amid competitive dynamics and mixed analyst sentiment.

Analysis

Analyst sentiment on Zillow Group (ZG) is moderately positive but divergent, with Bernstein raising its price target to $75.00 from $65.00 while maintaining a cautious Market Perform rating. This price target increase is primarily technical, resulting from a model roll-forward rather than an improved fundamental outlook, implying a 20x EV/NTM adjusted EBITDA multiple. Bernstein anticipates an in-line Q2 2025 earnings report, citing weakness in broader housing data, but identifies the Rentals and Mortgage segments as potential sources of upside. Despite the stock's significant 62.5% return over the past year, near-term headwinds are a concern. However, the consensus analyst view, including projections for FY2025 profitability with an EPS of $1.76, is shifting focus toward the second half of 2025. During this period, Zillow's ability to gain market share and leverage initiatives like Enhanced Markets will be critical. This contrasts with more bullish outlooks from DA Davidson (Buy, $85 PT), Citi (Buy, $83 PT), and JMP Securities (Market Outperform, $87 PT), who emphasize growing market share and the successful adoption of new products like Zillow Showcase Listings as key drivers for their optimistic ratings.

Key Decisions for Investors

• Given the stock's substantial 62.5% appreciation over the past year juxtaposed with Bernstein's cautious rating, investors may consider the risk-reward of taking some profits while monitoring for catalysts in the second half of 2025.
• The upcoming Q2 2025 earnings report should be scrutinized for performance in the Rentals and Mortgage segments, as strength here could signal resilience against the softer macro housing environment.
• Monitor competitive dynamics and data on market share gains, as Zillow's ability to execute on its 'housing super-app' vision and fend off rivals is the core thesis underpinning the more bullish analyst price targets.