Zevenbergen Capital Cuts Zillow Stake by 4% Amid Institutional Shifts

Zevenbergen Capital Investments LLC has reduced its stake in Zillow Group, Inc. (NASDAQ: Z) by 4% during the third quarter of 2023, as reported in its latest 13F filing with the Securities and Exchange Commission. Following the sale of 32,798 shares, the investment firm now holds 791,746 shares of the online real estate marketplace, valued at approximately $61 million. This reduction positions Zillow Group as the 26th largest investment for Zevenbergen, accounting for around 1.2% of its overall portfolio.

Several institutional investors have also made notable adjustments to their holdings in Zillow Group. Eminence Capital LP significantly increased its position by 63.6% in the second quarter, now owning 3,978,731 shares, worth about $278.7 million after acquiring an additional 1,546,577 shares. Meanwhile, Holocene Advisors LP entered the market with a stake valued at approximately $57 million during the same period. Ninety One UK Ltd raised its holdings by 17.4%, owning 4,731,948 shares valued at $331.5 million. Additionally, AQR Capital Management LLC grew its stake by an impressive 320% in the first quarter.

The actions of these institutional investors reflect a broader trend in the financial landscape, as hedge funds and other institutions currently hold about 71.01% of Zillow’s stock.

Analysts Weigh In on Zillow Group

In tandem with these shifts, several research firms have provided insights into Zillow Group’s stock performance. On October 3, Gordon Haskett upgraded shares to a “strong-buy” rating, while Keefe, Bruyette & Woods adjusted its target price from $85.00 to $80.00, maintaining a “market perform” rating. Weiss Ratings reiterated a “sell (d-)” rating on October 8, contrasting with Mizuho’s “strong-buy” upgrade on September 29. A report from Sanford C. Bernstein on September 17 raised Zillow’s rating from “market perform” to “outperform,” setting a price target of $105.00.

Overall, the stock has received mixed reviews from analysts. Currently, three analysts rate it as a Strong Buy, four as Buy, eight as Hold, and one as Sell. MarketBeat indicates that Zillow Group holds an average rating of “Moderate Buy” with a target price of $91.14.

Insider Transactions and Stock Performance

Recent insider trading activity has also captured attention. On November 12, insider Errol G. Samuelson sold 7,641 shares at an average price of $71.13, for a total transaction value of about $543,504. Following this sale, Samuelson owns 120,815 shares, valued at approximately $8.6 million. The transaction represented a 5.95% decrease in his position.

Chief Technology Officer David A. Beitel also sold 3,893 shares on the same day, netting approximately $276,870. Post-sale, Beitel retains 140,656 shares valued at around $10 million, marking a 2.69% reduction in his holdings. Over the last quarter, insiders sold a total of 67,511 shares worth $4.8 million, and insiders now own 25.03% of the company’s stock.

Zillow Group’s shares opened at $68.96 on Friday. The stock’s fifty-day moving average stands at $72.82, while the two-hundred-day moving average is $76.42. Over the past year, Zillow has fluctuated between a low of $57.51 and a high of $93.88, with a market capitalization of $16.69 billion.

In its latest earnings report on October 30, Zillow Group announced earnings per share (EPS) of $0.44, falling short of analysts’ expectations of $0.46. The company’s revenue for the quarter was $729 million, surpassing the consensus estimate of $670.28 million. Zillow reported a negative net margin of 1.29% and a negative return on equity of 0.56%. Analysts project an EPS of $0.32 for the current fiscal year.

Founded as an online real estate marketplace, Zillow Group operates a range of consumer-facing websites and mobile applications designed to facilitate connections among buyers, sellers, renters, and real estate professionals. The company generates revenue primarily through advertising and lead-generation services, utilizing platforms such as Zillow and Trulia, which offer searchable listings and property valuations.

The financial activities surrounding Zillow Group reflect ongoing shifts within the institutional investment landscape, as market players adapt to changing conditions and seek opportunities within the real estate sector.