“IBuying is dead, long live Zillow,” wrote RBC Capital analyst Brad Erickson, who cut this price target to $100 from $145, but kept his outperform rating.
A lot of Wall Street analysts covering Zillow Group Inc. had some negative things to say about the real estate services company on Wednesday, following its plan to get out of the home-flipping business, but that doesn’t mean they recommend investors sell the stock.
The Class C shares Z, -24.92% plunged 24.6% in afternoon trading and the Class A shares ZG, -22.95% plummeted 23.4%, both toward 15-month lows, after Zillow reported late Tuesday a surprise third-quarter loss and revenue miss, said it would cut about 25% of its workforce and announced plans to “wind down” its iBuying service after disclosing losses of more than $550 million on homes purchased.
If there’s a silver lining, it’s that the new average analyst target for the C shares is about 55% above current levels, and the average A price target implies 62% upside. Of course, analyst commentary wasn’t all rosy. BofA Securities’ Curtis Nagle dropped his price target to a Street low $50 from $85, and reiterated his underperform rating, saying the company “finally bids adieu to a very expensive ‘experiment.'”
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