Zillow Exceeds Expectations with $1 Billion Buyback Plan
The company's ability to exceed expectations and its confidence in its future prospects make it an attractive investment opportunity, with a potential for long-term growth and increased revenue.
Zillow Group's rental segment has surpassed expectations, while residential growth has lagged, and the company has announced a $1 billion stock buyback plan, indicating management's confidence in its future prospects.
Despite challenges in the US housing market, RBC Capital Markets predicts that Zillow will experience low-to-mid double-digit revenue growth this year. The company's partnership with Redfin, now part of Rocket, is expected to drive long-term growth. Zillow Group Inc reported a quarterly adjusted earnings of 41 cents per share, beating the mean expectation of 38 cents per share.
Revenue rose 13% to $598 million, above the expected $588 million, with a net income of $8 million. However, shares had fallen 1% this quarter and 8.3% year-to-date. Analysts had lowered their earnings estimates by 20.2% in the last three months, with four negative revisions in the last 30 days.
RBC maintains an "outperform" rating and a $88 target price, despite concerns about flat residential growth in 2025. The average analyst rating is "buy" with a median 12-month price target of $85, indicating a positive outlook for the company's future performance.
As Zillow continues to navigate the challenges in the US housing market, its $1 billion stock buyback plan and partnership with Redfin are expected to drive growth and increase investor confidence. With a strong quarterly earnings report and positive analyst ratings, Zillow is well-positioned for future success.