Zillow Shares Monster Rally Pauses After CRT Downgrade

On Tuesday, CRT Capital downgraded shares of Zillow

from Buy to Fairly Valued and maintained a $96 price target. Analyst Neil Doshi feels the stock has run to a level which makes the risk-reward “balanced.” The stock is now trading at “~12x 2015 P/S and ~44x 2015 EV/EBITDA,” according to the analyst. Doshi continues to believe Zillow is in “the best position to continue to gain market share from the competition in the Online Real Estate market.” Of the three leading online real estate companies, “Zillow is investing in key products to diversity its revenue base into new growth areas like Rentals and Mortgages,” said the analyst. Dosh's $96 price target is based on “40x the 2015 EBITDA of $102 million.” The stock is up despite the upgrade and momentum from the past week continues. The shares were up 18.3 percent over the past four sessions before the downgrade.