Zillow Group (ZG) Ancillary Services Will Help The Company Grow Into Its Valuation - Macquarie

Macquarie analyst, Ben Schachter, reiterated an Outperform rating and $54.00 price target on Zillow Group (NASDAQ: ZG) on the belief that ancillary real estate services (mortgages, title & escrow, renovations, etc) will likely be key value drivers in the future.

The analyst stated "The bottom line is that we like this transformation story. There will be lots of moving parts and significant risks. There will be a lot of learnings and failures. Valuation is going to be tricky for some time to come (our $54 PT implies 17.3x CY’22 EV/EBITDA and 0.8x CY’22 EV/Sales). As we’ve seen in other LT stories (such as AMZN), NT valuations will look extraordinarily high (our ZG PT implies 193x ’20 EV/EBITDA), but we view the LT opportunity as significant. We believe the evolving services ancillary to our current Homes model will drive the upside in the model".

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 $41.28 yesterday.

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