Core Viewpoint - The Federal Trade Commission (FTC) has filed an antitrust lawsuit against Zillow and Rocket Companies' subsidiary Redfin, alleging an unlawful agreement to suppress competition in the online rental housing advertising market, leading to a decline in Zillow's shares by 4.3% [1][2]. Summary by Sections Antitrust Allegations - The FTC's complaint details a $100 million agreement between Zillow and Redfin, executed in February, where Redfin agreed to terminate contracts with advertising customers and syndicate only Zillow rental listings, granting Zillow exclusive control over multifamily rental listings on Redfin's platforms [2][3]. - The complaint also states that Redfin downsized its workforce significantly after the agreement, with some employees being hired by Zillow [2]. Market Impact - The FTC argues that the agreement could lead to higher prices, fewer options, and poorer service for renters and property managers due to the concentration of rental listing services [3][4]. - Zillow's stock has shown volatility, with 12 stock moves greater than 5% in the past year, indicating that the market views the lawsuit as significant but not fundamentally altering the perception of the business [6]. Analyst Ratings and Stock Performance - Zillow has a 'moderate buy' consensus rating from analysts, with an average 12-month stock price target of $90.14, suggesting a potential upside of 20% from current levels [5]. - Year-to-date, Zillow's shares have gained approximately 0.5%, trading at $71.18, significantly below its 52-week high of $86.76, and reflecting a decline of over 33% over the past five years [7]. - In contrast, Rocket Companies has a 'hold' consensus rating, with a 12-month average stock price target of $13.83, indicating a downside risk of over 25% from current trading levels [8].
Zillow Stock Skids 4.5% After FTC Lawsuit — Is It Still A Buy Now?