RBC Upgrades Zillow After Latest Real Estate Agent Survey Points To Upside

RBC Capital Markets’ Mark S. Mahaney upgraded the rating for Zillow Group, Inc.- Class A ZG from Sector Perform to Outperform, while raising the price target from $21 to $34. The analyst noted that both the annual real estate agent survey and consumer survey had yielded positive results.

RBC’s 4th Annual Online Real Estate Agent Survey

Analyst Mark Mahaney mentioned the key takeaways from the recent survey of about 470 US real estate agents:

1. Online real estate adoption continued to be significant
2. Zillow’s share hit at a record high
3. Agents are most likely to increase their spend on Zillow
4. Zillow scored well with agents who spent more than $500 per month in online advertising

Consumer Survey

Mahaney noted the key takeaways from the NAR’s most recent profile of Home Buyers and Sellers: 

1. Increasingly used by home buyers
2. Internet continued to be the most important source of information in the process of home buying
3. Internet may prove to be beneficial for agents

comScore Traffic Data

Traffic data published by comScore indicated that Zillow leads Online Real Estate properties, recording 65MM unique visitors to its site. Moreover, March quarter data indicated significant acceleration of 34 percent y/y and 21 percent q/q in Zillow traffic growth.

The analyst cited “our belief that Street estimates have been sufficiently de-risked, insider buying, and a relatively attractive valuation setup” as other reasons for the upgrade in rating.