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Zillow Shares Upgraded to Overweight by Piper Sandler, Price Target Set at $62
Piper Sandler Optimistic About Zillow's Future
Piper Sandler has upgraded shares of Zillow to overweight and raised its price target to $62, implying a 33% upside potential. Analyst Thomas Champion believes that Zillow has a promising future driven by continued Premier Agent share gains, product optionality, and new initiatives. Despite a tough start to the year, the housing market is expected to stabilize, benefiting Zillow's Premier Agent product, which allows real estate agents to track industry metrics and clients. Furthermore, Champion notes that Zillow gained the most market share since 2018 in the first quarter of 2023.
Favorable Revenue Outlook for Zillow
While some firms on Wall Street are conservative in their revenue outlook for Zillow, Champion sees this as an opportunity for investors. He notes that the street is only projecting $2.5 billion in revenue for 2025, while Zillow has set a target of $5 billion. Champion believes that software will play an increasingly important role for Zillow and is confident in its ability to meet its revenue goals.
Positive Macroeconomic Factors
Champion also highlights positive macroeconomic factors that will support Zillow's growth. Estimates from ratings agency Fannie Mae show that existing home sales are expected to improve in the fourth quarter, with a year-over-year decline of only 2% compared to a 32% drop in the previous year. This suggests a rebound in the housing market, which will benefit Zillow.
Opportunity for Growth and Investment
With Piper Sandler's optimistic outlook for Zillow and the potential for market share gains, investors may find Zillow an attractive opportunity for growth. Champion's upgrade and raised price target demonstrate confidence in Zillow's future prospects. As Zillow continues to expand its product offerings and take advantage of market opportunities, it has the potential to deliver significant returns for investors.
Conclusion: Zillow's Positive Outlook Presents Opportunities for New Businesses
Zillow's promising future, as highlighted by Piper Sandler's upgrade and raised price target, provides valuable insights for new businesses entering the real estate market.
Zillow's recent upgrade and optimistic outlook from Piper Sandler indicate a potential resurgence in the housing market and a favorable environment for new businesses. With continued Premier Agent share gains, product optionality, and new initiatives, Zillow is well-positioned to capitalize on the stabilization of the housing market. This creates opportunities for new businesses to leverage Zillow's platform and services to establish themselves within the industry.
Analyst Thomas Champion's confidence in Zillow's revenue goals, coupled with the increased role of software in the company's operations, suggests that technology and innovation play crucial roles in achieving success in the real estate market. Therefore, new businesses that emphasize the development and implementation of cutting-edge software solutions can potentially thrive in this evolving landscape.
Furthermore, positive macroeconomic factors, such as the projected improvement in existing home sales, provide a supportive backdrop for Zillow's growth. New businesses can align their strategies with the expected rebound in the housing market, positioning themselves to benefit from increased demand for real estate-related services.
Overall, the positive outlook for Zillow, as underscored by Piper Sandler's assessment, offers valuable lessons for new businesses in the real estate industry. By recognizing the potential for growth, emphasizing technological advancements, and capitalizing on favorable market conditions, new ventures can position themselves for success and harness opportunities presented by Zillow's ongoing expansion.
Article First Published at: https://www.cnbc.com/2023/07/11/piper-sandler-upgrades-zillow-sees-real-estate-stock-rallying-more-than-30percent.html