Following meetings with Zillow's (Z +3.4%) CFO, sales chief, and mortgage head, Canaccord thinks the company's Premier Agent business remains strong, and that its mortgage and rentals businesses are making nice progress. The firm's PT has been upped by $15 to $130.
Canaccord observes only ~53K of the 675K+ real estate agents with Zillow profiles have thus far advertised on the site, leaving plenty of room for growth.
Likewise, it believes less than 25% of the ~350K "thought-leading, high-producing agents" out there are on Zillow or Trulia (TRLA +3.8%), and that Zillow only captures 2% of real estate ad budgets and 4% of available transaction sides.
The firm sees more dynamic pricing boosting Zillow's growth. It also see a Zillow/Trulia merger as possible down the line, arguing it "could be quite accretive to Zillow even before factoring in any revenue synergies from pricing power."
Zillow and Trulia rose last Friday after Trulia released positive May traffic data.