KeyBanc upgrades Zillow as housing market improves

On February 3, 2025, KeyBanc issued a report stating that Zillow has significant potential for stock growth amid an improving housing market in the United States. Analyst Sergio Segura raised Zillow's rating from sector weight to overweight, projecting a price target of $100, suggesting a 26.3% upside from its current stock price. Segura highlighted Zillow's innovative app experience as a vital factor for growth, anticipating that an increase in existing home sales could act as a beneficial macroeconomic driver for the company. He noted that Zillow's integrated app experience and its investments in expanding markets could support sustained mid-teens growth. The firm adjusted its revenue estimates for Zillow upwards by 1% for 2025 and 3% for 2026, reflecting confidence in the site's ability to attract more users and market share. Segura emphasized that Zillow operates as a "one-stop shop for all things real estate," further diversifying its services to include rentals and mortgages. Despite the optimistic outlook, he acknowledged that the consensus estimates could have further upside, even if the anticipated housing market improvements do not fully materialize as expected. The sentiment among analysts regarding Zillow is mixed, with reports indicating that of the 28 analysts monitoring the stock, 15 have assigned it a buy or strong buy rating. The remaining 13 have a hold or underperform rating, illustrating a divided opinion on Zillow’s stock performance in the potentially changing market environment. KeyBanc's optimistic stance on Zillow could potentially influence investor sentiment positively but will heavily depend on the actual performance of the housing market in the coming years. The broader economic context suggests that as home sales continue to increase, Zillow’s growth trajectory could align with the rebound in the housing sector. As the real estate marketplace adapts to changing consumer needs and technological advancements, it remains crucial for stakeholders to keep an eye on how well Zillow capitalizes on these opportunities amidst competitive pressures in the industry.