Days before the company reports its fourth-quarter and full-year 2020 earnings, Zillow’s share price is soaring to a new all-time high. And it’s not just because of a steamy, viral Saturday Night Live skit that has everyone talking about the real estate technology company.
Heath Terry | Photo credit: Goldman Sachs
Analysts for both Deutsche Bank and Goldman Sachs have released bullish notes on the publicly traded firm in the past week, sending the company’s share price skyrocketing near an all-time high of about $169 per share for the company’s class A stock.
“Zillow’s investments in technology and business model evolution to improve conversion of site visitors to homebuyers/sellers, increase purchase/sale options, and enhance the experience for agents & consumers are likely to improve [return on investment] for agents and drive more spend to Zillow’s properties,” Heath Terry, an analyst for Goldman Sachs said in a note to investors, in which he raised the company’s price target to $200 per share, according to Yahoo Finance.
“With roughly two-thirds of visits to online real estate sites in the U.S. going to Zillow platforms and the company only commanding less than 10 percent of real estate agent/broker advertising dollars, we expect the company’s efforts to improve conversion, expand purchase options, and diversify revenue streams will meaningfully narrow the gap between these two metrics over the next five years,” Terry added.
In a separate note, Deutsche Bank analyst Lloyd Walmsley raised the target price to $202 per share and doubled down on the “buy” rating he has on the company’s stock.
Walmsley, in a note to investors, called Zillow a “secular post-COVID winner,” according to MarketWatch, specifically singling out the company’s “Partner Leads” and “Flex” programs, which are part of Zillow’s Premier Agent advertising program.
Zillow will report its earnings after markets close on Wednesday and will follow with an investor call at 5 p.m. ET.
In the third quarter of 2020, the company posted $657 million in consolidated revenue across all business segments, which handily beat expectations. It also posted $40 million in net income in the quarter, the most in company history and the first time the company posted a profit since 2017.