"$130 million [is] a surprisingly small sum in the context of the $2 billion in damages Move was originally seeking," Merwin said. The analyst expected a settlement of at least $500 million, viewing the $130 million penalty as "highly favorable" for Zillow.
Additionally, the analyst appreciated Zillow's announcement to introduce a self-serve advertising product that could account for significant reduced expenses. "We believe [the initiative] could eventually create significant savings in sales expense, which accounts for an estimated ~29 percent of sales in 2016E," said the analyst.
To reflect trial results, Barclays raised 2016 EBITDA estimates to $133 million from $116 million while increasing the target multiple given a new long-term opportunity from self-serve adds.
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