UPDATE: Goldman Sachs Downgrades Zillow to Neutral Following Strong 1Q Growth, Full Valuation

In a report published Wednesday, Goldman Sachs analyst Heath P. Terry downgraded the rating on Zillow

from Buy to Neutral, but raised the price target from $60.00 to $67.00. In the report, Terry noted, “While 1Q was a strong quarter on most every metric, Zillow guided to decelerating revenue growth despite a significant increase in marketing investment that will lead to declines in EBITDA yoy. While we expect the investments will likely drive growth above the company's forecasts, we believe the stock's premium multiple currently reflects that kind of positive outcome and believe upside during this investment cycle could be limited, despite the strong housing market. Therefore, we remove Zillow from our Buy List. Since being added to the Buy List on 10/17/12, shares are up 66% vs. the Russell 2000 up 15%. Over the last 12 months shares are up 53% vs. the Russell 2000 up 22%.” Zillow closed on Tuesday at $62.94.