JMP: Zillow Stock Still Worth Triple Digits After DotLoop Acquisition

In a report published Thursday, JMP Securities analyst Ronald V. Josey maintained a Market Outperform rating on

, with a price target of $121. Zillow announced the acquisition of DotLoop, a SaaS-based workflow tool that brings the transaction process of buying real-estate online. While the Trulia acquisition had required "significant integration," the acquisition of DotLoop may be considered as "more of a plug-and-play acquisition within Zillow Group's increasingly diverse portfolio of products and one that could ultimately improve attribution for advertisers on Zillow," analyst Ronald Josey said. Zillow did not disclose the terms of the acquisition. Josey believes that the company paid cash and that the acquisition would close in 3Q. "Interestingly, this is on the heels of Zillow announcing the creation of class C non-voting shares via a stock dividend for shareholders of record as of July 31," the analyst pointed out. Zillow is scheduled to report its 2Q15 earnings in the first week of August. "While we acknowledge the uncertainties around the Trulia integration, the potential impact to 2Q agent net additions, and the lack of transparency in reporting, we continue to believe that post integration, Zillow Group can extend its lead within the online real estate vertical as a more profitable overall enterprise and we expect to start seeing some benefits by YE2015," the JMP Securities report stated. The estimates for FY15 are of revenue of $665M, representing 15 percent Y/Y growth, EBITDA of $82.1M, with 3.3 percent Y/Y growth and 12.4 percent margin, and PF EPS of ($0.17).