Zillow Still Strong But Trulia 'Hasn't Turned Yet', Says Pacific Crest (ZG) (Z)

Pacific Crest maintained a Sector Weight rating on Zillow Group (NASDAQ: ZG) (NASDAQ: Z). Analyst Evan Wilson said checks showed Zillow was still strong, though Trulia "hasn't turned yet."

"Most agents we talked to said business with Zillow is business as usual, with most expecting to increase or maintain spending on the site. In the second quarter of the technology combination with Trulia, we did not pick up any incremental complaints," said Wilson.

"The most surprising part of our conversations was that most noted the decreasing role Trulia is playing in terms of generating leads. Although Zillow was always the more popular platform, it seems Trulia is producing less and becoming less prominent. The company has stated it intends to maintain the two separate brands and turn Trulia's growth around, but it seems that is still an issue that will be worked out in 1H16 at the earliest. Other than initial 2016 guidance, this is our key focus for the upcoming earnings call," continued the analyst.

Wilson added, "Zillow's mobile traffic has grown steadily in the three months since our last checks, and its desktop traffic has grown in two out of the three months. Trulia's traffic in comparison is decreasing at a 10%-20% clip on desktop and it grew mobile traffic at a fraction of Zillow's rate over the same period. This is evidence of Zillow's increasing relevance in the marketplace, very likely at the expense of Trulia. New comScore data should be out soon for December."

For an analyst ratings summary and ratings history on Zillow Group click here. For more ratings news on Zillow Group click here.

Shares of Zillow Group closed at $23.63 yesterday.

You May Also Be Interested In

• UBS Reiterates Neutral Rating on LVMH Moet Hennessy Louis Vuitton SE (MC:FP) (LVMUY)
• Stephens Reiterates Equal Weight Rating on Hancock Whitney (HWC)
• Sage Therapeutics (SAGE) PT Lowered to $17 at Oppenheimer