Zillow Stock Plunged on Google Listing News, But 1 Analyst Still Thinks It Can Gain 50% from Here

Core Viewpoint - Zillow Group (Z) is currently experiencing a decline in stock price, attributed to Alphabet's Google testing home sales ads in search results, but several banks believe the impact on Zillow will be limited [1][6]. Group 1: Stock Performance - Zillow's stock has decreased by 20% over the past three months and nearly 10% since the news of Google's ad placement emerged on December 12 [4]. - Bernstein maintains a bullish outlook on Zillow, with a price target approximately 50% above the current stock price [1]. Group 2: Financial Performance - In Q3, Zillow's revenue increased to $676 million, up from $581 million in the same period last year [5]. - The company reported a net income of $10 million from continuous operations, a significant improvement from a net loss of $20 million in Q3 of 2024 [5]. Group 3: Market Position and Ratios - Zillow's price-sales ratio stands at 7.6 times, while its price-book ratio is 3.4 times, with a market capitalization of $16.65 billion [4]. Group 4: Industry Impact - RBC Capital suggests that while Zillow may face some challenges from Google's initiative, the impact will not be severe due to potential conflicts with Multiple Listing Service (MLS) distribution rules [6]. - Wells Fargo also predicts minimal financial impact on Zillow, noting that the company derives little traffic from organic search [7].