UPDATE: SunTrust Robinson Humphrey Downgrades Zillow (Z) to Neutral on Valuation

SunTrust Robinson Humphrey downgraded Zillow (NASDAQ: Z) from Buy to Neutral with a price target of $110.00 (unchanged). The downgrade is tied to valuation.

Analyst Robert S. Peck said, "We are lowering our rating today on Zillow to Neutral from Buy, based on the strong run the stock has had and its sustained surpassing of our $110 year end 2014 target. While we remain very bullish on the long term prospects for the company and the large TAMs it is addressing, we think the market has accounted for some of the opportunity, making the stock expensive in the short term to our coverage universe at 11.2x 2015 revenues and 55x 2015 EBITDA."

"We look at our stocks on a central tendency of value basis, which employs EV / Revenue / growth, EV / EBITDA / growth, and EV / EBITDA / rev growth. In comparing these 2015 multiples to our coverage universe, Zillow trades (on our higher than Street estimates) at a premium of 0.3x, 0.6x and 1.2x on these metrics to our universe of 0.2x, 0.5x and 0.9x for the coverage universe. Importantly, for an investor to receive a 15% return from yesterday’s close, would imply a $136 target price, which would indicate higher multiples of 0.3x, 0.7x, and 1.4x," he added.

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

Shares of Zillow closed at $117.93 yesterday.

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