Zacks Research Downgrades Zillow Group (NASDAQ:Z) to Hold

Zillow Group (NASDAQ:Z) was downgraded by equities research analysts at Zacks Research from a “strong-buy” rating to a “hold” rating in a research report issued on Tuesday,Zacks.com reports.

A number of other brokerages have also issued reports on Z. Keefe, Bruyette & Woods cut their price target on Zillow Group from $50.00 to $37.00 and set a “market perform” rating for the company in a research note on Monday, July 13th. UBS Group dropped their price target on Zillow Group from $80.00 to $75.00 and set a “buy” rating for the company in a research note on Tuesday, April 28th. Deutsche Bank Aktiengesellschaft lowered their target price on shares of Zillow Group from $80.00 to $68.00 and set a “buy” rating on the stock in a report on Friday, May 8th. Wall Street Zen raised shares of Zillow Group from a “hold” rating to a “buy” rating in a research note on Saturday, May 9th. Finally, JPMorgan Chase & Co. dropped their price objective on shares of Zillow Group from $84.00 to $76.00 and set an “overweight” rating for the company in a report on Thursday, May 7th. Two equities research analysts have rated the stock with a Strong Buy rating, six have assigned a Buy rating, seven have assigned a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average target price of $72.38.

Zillow Group Stock Performance

Shares of Zillow Group stock opened at $36.10 on Tuesday. Zillow Group has a 52-week low of $29.23 and a 52-week high of $93.88. The company’s 50 day moving average price is $33.12 and its 200-day moving average price is $41.84. The stock has a market capitalization of $8.26 billion, a price-to-earnings ratio of 144.40, a P/E/G ratio of 1.55 and a beta of 1.98.

Zillow Group (NASDAQ:Z) last issued its quarterly earnings data on Wednesday, August 5th. The financial services provider reported $0.52 earnings per share for the quarter, topping analysts’ consensus estimates of $0.45 by $0.07. Zillow Group had a return on equity of 1.41% and a net margin of 2.27%.The firm had revenue of $772.00 million for the quarter, compared to analyst estimates of $758.10 million. As a group, equities research analysts forecast that Zillow Group will post 0.9 earnings per share for the current fiscal year.

Insider Activity

In other Zillow Group news, insider Errol G. Samuelson sold 2,939 shares of the firm’s stock in a transaction dated Thursday, May 14th. The shares were sold at an average price of $37.97, for a total transaction of $111,593.83. Following the transaction, the insider owned 134,039 shares of the company’s stock, valued at approximately $5,089,460.83. This trade represents a 2.15% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Jeremy Hofmann sold 5,501 shares of the stock in a transaction on Monday, May 18th. The shares were sold at an average price of $37.40, for a total value of $205,737.40. Following the sale, the chief financial officer directly owned 68,315 shares in the company, valued at $2,554,981. This trade represents a 7.45% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last 90 days, insiders have sold 42,910 shares of company stock valued at $1,605,732. Company insiders own 25.03% of the company’s stock.

Hedge Funds Weigh In On Zillow Group

Hedge funds and other institutional investors have recently modified their holdings of the stock. V Square Quantitative Management LLC acquired a new stake in Zillow Group during the 4th quarter valued at approximately $28,000. Flagship Harbor Advisors LLC acquired a new stake in Zillow Group in the 4th quarter valued at about $43,000. Leonteq Securities AG boosted its stake in Zillow Group by 627.0% during the first quarter. Leonteq Securities AG now owns 1,345 shares of the financial services provider’s stock worth $56,000 after buying an additional 1,160 shares during the last quarter. EverSource Wealth Advisors LLC increased its position in Zillow Group by 283.2% during the first quarter. EverSource Wealth Advisors LLC now owns 1,414 shares of the financial services provider’s stock worth $59,000 after purchasing an additional 1,045 shares during the last quarter. Finally, IFC & Insurance Marketing Inc. purchased a new stake in shares of Zillow Group during the 4th quarter valued at approximately $68,000. 71.01% of the stock is owned by hedge funds and other institutional investors.

Zillow Group News Roundup

Here are the key news stories impacting Zillow Group this week:

• Positive Sentiment: Zillow reported second-quarter revenue of $772 million, up approximately 18% year over year and above the $758 million analyst consensus. Adjusted earnings of $0.52 per share also exceeded estimates of roughly $0.44-$0.45 and improved from $0.40 a year earlier. Zillow Q2 earnings article
• Positive Sentiment: Management promoted senior executives and expanded CFO Jeremy Hofmann’s responsibilities to include chief operating officer. Zillow also appointed Cassandra Knight as its first chief legal and policy officer, changes intended to support its integrated housing “super app” strategy. Zillow executive leadership announcement
• Neutral Sentiment: The company is eliminating more than 500 positions, or about 7% of its workforce, as part of an organizational restructuring. Zillow said the changes are intended to improve efficiency, but the near-term benefit is offset by substantial restructuring costs. A subsequent filing indicated that 91 Washington jobs were affected, with senior positions bearing much of the impact. Zillow workforce reduction article
• Negative Sentiment: Zillow posted a $4 million net loss despite the revenue and adjusted-EPS beats. A $36 million restructuring charge weighed on results, compared with analyst expectations for approximately $21 million of net income, creating concern about reported profitability. Zillow restructuring loss article
• Negative Sentiment: Forward guidance was soft: third-quarter revenue was projected at $745 million-$760 million, below the $772.3 million consensus, while full-year revenue guidance of $2.9 billion-$3.0 billion was only around or below the $3.0 billion estimate. The outlook prompted selling in after-hours trading. Zillow soft outlook article
• Negative Sentiment: Several law firms publicized securities-fraud class actions and an August 10 lead-plaintiff deadline tied to alleged misrepresentations concerning Zillow’s business practices. The repeated legal notices add reputational and potential financial risk, although the allegations have not been proven. Zillow securities lawsuit information

About Zillow Group

Zillow Group, Inc is an online real estate marketplace company that operates a portfolio of consumer-facing websites and mobile apps designed to connect buyers, sellers, renters, homeowners and real estate professionals. The company’s platforms aggregate property listings, rental listings, and related information to help users search for homes, estimate property values and connect with agents and service providers. Zillow generates revenue primarily through advertising and lead-generation services for real estate professionals, property managers and mortgage lenders.

Key products and services include the Zillow and Trulia consumer websites and apps, which provide searchable listings, photos, neighborhood data and the company’s automated home valuation tool known as the “Zestimate.” Zillow also offers a rentals marketplace, a mortgage marketplace and tools for home buying and selling such as Zillow Premier Agent for agent advertising and leads, as well as ancillary services designed to support transactions, including closing and title-related offerings.