Keefe, Bruyette & Woods on Wednesday reduced its price target for Zillow Group to $60.00 from $65.00 while maintaining a Market Perform rating on the real estate technology company.
The firm's reassessment followed Zillow's 2026 guidance, which KBW described as "largely in line despite margin headwinds from legal expenses." KBW said it trimmed its 2026/27 AEBITDA estimates by roughly 1% to reflect higher expenses; that cut was partially offset by raised revenue projections.
Despite the modest AEBITDA reduction, KBW moved its adjusted EPS and GAAP EPS forecasts higher. The research house attributed those upward revisions to a lower share count and reduced stock-based compensation expenses, which improved per-share metrics on their model.
Under KBW's 2027 projections, the new $60 price target equates to 14 times EBITDA and 16 times free cash flow, according to the firm.
Separately, Zillow reported fourth-quarter 2025 results on February 10, 2026. The company posted revenue of $654 million, compared with a forecast of $650.23 million, and earnings per share of $0.39, against an expected $0.40. That EPS result represented a 2.5% negative surprise, while revenue modestly exceeded expectations.
The KBW note frames its valuation and forecast adjustments around Zillow's guidance and the company's recent quarterly results. The firm left its recommendation unchanged even as it adjusted near-term profitability projections and updated per-share forecasts based on the company's evolving capital structure and compensation expense outlook.
Takeaway - KBW lowered its price target to $60 and kept a Market Perform rating after assessing Zillow's 2026 guidance and recent quarterly results. The firm trimmed AEBITDA estimates by about 1% because of higher expenses but raised EPS estimates due to a lower share count and reduced stock-based compensation. The new target implies 14x EBITDA and 16x free cash flow on 2027 estimates. Zillow's Q4 2025 revenue beat consensus while EPS missed by 2.5%.