Barclays: Zillow Stock Now Worth ~10% Less

In a report published Wednesday, analysts at Barclays maintained their Equal-Weight rating on Zillow Group, Inc (NASDAQ: Z), while lowering their estimates for the company. The price target has also been downgraded from $105 to $95.On Wednesday morning, Zillow issued its 2015 guidance significantly below the consensus, while also provided an update on its integration with Trulia."[We] anticipate 2015 will be a challenging year, as traffic and agent growth slows, particularly for the Trulia brand. We still believe 2016 will be a better year, but arguably now there are greater risks to next year's top line and EBITDA growth, if organic trends continue to slow for Trulia, or if Zillow has to invest incrementally in traffic growth," the analysts said. Although Zillow's brand remains stable, the company would need to rely on ARPA for a majority of its top-line growth due to slowing agent growth. The company is also expected to see tough comps in its lender re-marketing segment. The analysts have lowered their 2015 revenue estimate from $758 million to $691 million and there 2015 and 2016 EBITDA from $140 million to $82 million and from $304 million to $224 million, respectively."We believe the shortfall to guidance was mainly due to lower expected revenue from core Trulia, as well as Market Leader, which management expects will do $40M of pro forma revenue in 2015," the analysts added.