Optimistic Financial Outlook Sparks Confidence in Zillow Group (ZG)

Zillow Group (NASDAQ:ZG) is one of the 10 best real estate services stocks to buy according to hedge funds.

On January 29, Trevor Young at Barclays upgraded his rating on Zillow Group (NASDAQ:ZG) from Underweight to Equalweight. He also raised the price target from $66 to $72, implying 34% upside. The favorable revisions were based on promising revenue and adjusted EBITDA growth anticipated for the coming year.

On January 13, the price target on Zillow Group (NASDAQ:ZG) was reduced from $90 to $85, and the stock was assigned an Outperform rating by Citizens analyst Andrew Boone.

Although the revised price target still yields an impressive upside of over 58%, the analyst reflected on the merger between Compass Incorporated (NYSE:COMP) and Anywhere. The deal has led to some concerns for Zillow Group (NASDAQ:ZG), stemming from the two merged companies’ combined Private Exclusives inventory. He noted that Compass Incorporated (NYSE:COMP) allows users to access its non-public listings, and the cumulative effects of these factors might lead to Zillow becoming an inferior choice for users.

Zillow Group (NASDAQ:ZG) is a technology-enabled platform for the real estate market, operating through websites and mobile applications. It offers marketplaces for rentals, construction, agents, and advertising of properties. Moreover, it also offers SaaS solutions for real estate transaction management. The company ensures a seamless experience for users who benefit from end-to-end real estate transaction solutions.

While we acknowledge the potential of ZG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.