Zillow (ZG) PT Raised to $42 at RBC Capital Amid Strong Q2
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RBC Capital analyst Mark Mahaney reiterated an Outperform rating and raised his price target on Zillow Group (NASDAQ: ZG) (NASDAQ: Z) to $42.00 (from $36.00) following strong Q2 esults, with the company outperforming Street top and bottom line expectations and raising the FY guidance.
What investors need to know, according to Mahaney: "1) Revenue Continues To Accelerate – On a pro-forma basis, with Total Revenue going to 31% Y/Y (from 25%), Marketplace reaching 44% Y/Y (from 23%) and Mortgages reaching 77% Y/Y (from 65%). 2) EBITDA Leverage Is Coming Through – EBITDA reached $29MM, marking a 14% margin, up 2pts Y/Y… and 13pts Q/Q. 3) Excess Legal Fees Are Now Behind Zillow – ZG had one-time legal fees in the quarter of $130MM from the settlement with Move. ZG had previously forecast legal expenses in the back-half of the year and now expects to reinvest some of those savings into the biz. 4) Metrics Remain Solid – May traffic set a new all-time traffic record of 171MM+ Unique Users, with ZG now holding 67% of the category market share according to comScore. ARPU reached $536 (up 43% Y/Y) while Agent Subs decreased slightly (0.7K) to reach 91,200."
2017 Revenue & EBITDA estimates increased 3% & 21% to $1.05B and $262MM.
Shares of Zillow Group closed at $39.35 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
Related EntitiesRBC Capital, Mark Mahaney
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