Investment bank Needham & Company has initiated coverage on Zillow Group with a Buy rating and price target of $40, citing the company's dominance, revenue and EBITDA growth opportunities, reports Seeking Alpha.
Needham's senior analyst Kerry Rice said:
"We expect real estate agents to spend more of their marketing budget on Zillow in the coming years given our belief that its portfolio of websites remains the go-to destination for consumers. While network effects and the scale of Zillow's marketplace create a virtuous cycle and competitive advantages, we believe the core revenue growth driver is agents' embracing Zillow to unlock significant returns on their marketing dollars.
"We believe Zillow’s core addressable market is significant and expanding opportunity with sizable adjacent markets, such as mortgages and rentals layering on additional growth opportunities. We expect margins to expand on solid revenue growth. We view Zillow’s competition as limited and its lead is extending."