Real estate search giant Zillow became a $5 billion company today, at least in the eyes of investors who snatched up shares in the company and pushed its share price and market capitalization to new records.
Shares of Zillow rose nearly 6 percent Monday after analysts at Canaccord Genuity, citing the company’s potential growth and the possibility of an eventual merger with Trulia, raised their price target to $130 per share. While more than 675,000 real estate agents have created free profiles on the site, only 53,000 are advertisers, demonstrating the potential for growth, analysts said.
Zillow Chief Revenue Officer Greg Schwartz (center) rings the NASDAQ closing bell during a Jan. 15, 2014, visit to the stock exchange. Photo copyright 2014, The NASDAQ OMX Group Inc.
Canaccord analysts noted that six investors with a 42 percent stake in Zillow also own 52 percent of Trulia, “potentially reflecting their desire to see consolidation in the vertical.”
Shares in Zillow and Trulia also surged Friday after Trulia said consumer traffic was up 47 percent from a year ago in May, to 51 million monthly unique visitors.
Zillow shares soared $7 to close a penny above Canaccord’s price target, after briefly hitting a new 52-week high of $130.20. Monday’s closing price values the company at $5.14 billion, 15 times the size of Re/Max LLC and surpassing the likes of HomeAway ($2.96 billion) and even some household names like The New York Times Co. ($2.3 billion).