Needham & Company Remains Bullish on Zillow Group, Inc. (ZG) Following 3Q Release and Guidance
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Needham & Company reiterated a Buy rating and $40.00 price target on Zillow Group, Inc. (NASDAQ: ZG) following the company's 3Q earnings report. Zillow delivered total revenue of $224.6M, ahead of consensus of $221.0 driven primarily by growth in the Premier Agent business. Management raised the FY16 revenue guidance to $837-842M which is up by $7M at the low-end and $4.5M at the midpoint and above consensus of $837.3M.
Analyst Kerry Rice commented, "Zillow delivered solid 3Q16 upside with Premier Agent the primary growth engine. Adj. EBITDA upside was driven equally by revenue outperformance and cost efficiencies. Q4 guidance was tempered as the company is rolling out several new products broadly in Q4, including its self-service interface. While adoption of the self-service interface is uncertain, we believe guidance could prove conservative given the positive indicators from agents in more limited initial launch. The remaining products could layer on incremental revenue and potential upside if adoption is rapid, in our opinion. While EBITDA margin compresses in the seasonally slower Q4, we expect the company to continue to benefit from economies of scale and steadily progress towards its long-term EBITDA margin target of 40%. We continue to be buyers of ZG shares."
Shares of Zillow Group closed at $32.78 yesterday.
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