Benchmark reaffirms Zillow stock rating citing legal case outlook

Benchmark reaffirms Zillow stock rating citing legal case outlook

Gold slides as U.S.-Iran conflict lifts oil, hawkish Fed bets grow Investing.com - Benchmark reiterated a Buy rating and $110.00 price target on Zillow Group (NASDAQ:ZG) stock. The target represents significant upside from the current price of $32, which sits 65% below the stock’s 52-week high of $90.22. According to InvestingPro analysis, the stock appears undervalued relative to its Fair Value, placing it among companies on the Most Undervalued list.

Analyst Daniel Kurnos said the firm believes Zillow is positioned to win the near-term MRED dispute, particularly regarding preserving feed access through a preliminary injunction. A final antitrust victory remains more difficult to predict, according to the analyst. In the FTC case, Benchmark said the government has a clearer narrative around paying a competitor to exit.

The court’s motion-to-dismiss language was not favorable for Zillow, and the FTC’s failure to win partial summary judgment improves Zillow’s position heading into the August bench trial. Benchmark said Zillow has a good chance to win the MRED case and a credible but not dominant chance to defeat the FTC outright. The firm believes neither case is likely to materially alter the long-term Zillow thesis.

The Dupuis case is the most strategically significant of the secondary cases because it challenges Zillow’s vertical-integration model rather than a listing or rentals agreement, Benchmark said. The firm believes Zillow has a good chance to defeat or materially narrow the complaint at the motion-to-dismiss stage. Despite legal headwinds, InvestingPro Tips highlight that the company remains profitable over the last twelve months and holds more cash than debt on its balance sheet.

For deeper insights, investors can access Zillow’s comprehensive Pro Research Report, one of 1,400+ available reports transforming complex data into actionable intelligence. In other recent news, Zillow Group Inc. has launched Zillow Pro, a premium membership program for real estate agents, providing tools to connect with buyers and sellers. This program allows agents to collaborate with their network on Zillow, offering insights into browsing activities and enhancing client outreach capabilities.

Nearly 20,000 agents participated during its beta phase. Meanwhile, Morgan Stanley reiterated its Equalweight rating for Zillow, maintaining a $70 price target, despite Google’s new feature integrating for-sale home listings into search results. BTIG also held its Neutral rating on Zillow as Google expands this feature nationwide.

RBC Capital, however, lowered its price target for Zillow from $95 to $70, citing concerns over AI developments. In another development, Citizens reaffirmed its Market Outperform rating with a $75 price target following a dispute in Chicago that led to the removal of thousands of listings from Zillow. These recent developments highlight the dynamic landscape Zillow is navigating amid competitive pressures and technological advancements.