What The Street Sees Behind Zillow's Numbers

In research notes Wednesday, analysts on Wall Street showed solidarity in the reading of Zillow Group Inc (NASDAQ: Z)'s Q1 earnings report, though the analysis moving forward is quite mixed.

Both SunTrust and Benchmark maintained their Buy ratings with $130 and $135 price targets respectively. RBC Capital Markets agreed that the future looked bright, but labeled this year a "transition year" for the company given "integration challenges" with the Trulia acquisition.

That uncertainty is echoed in other analysts' notes, with both Barclays and Raymond James maintaining their respective Equal-Weight and Market Perform ratings. Barclays was the only house to cut its price target, lowering it by $5 to $90. The analysts pointed to a lower 2016 EBITDA estimate of $192 million in anticipation of a higher marketing spend. Barclays also said that "growth will decelerate into the mid-teens" in the second half of 2015 before "reaccelerating" to 26 percent in 2016.

Benchmark also said marketing spend is likely to accelerate in Q2 2015 after pulling back on advertising in the first quarter. As such, the analysts noted that there could be a "greater trade-off between revenue and margin expansion" that consensus currently expects.

SunTrust references these expectations, calling them "sufficiently low" and providing the opportunity for the company to outperform. SunTrust's Bob Peck also said the "core markets and newer businesses are on track for long-term growth."

Zillow has rallied into the mid-day session, erasing earlier losses of up to 2 percent. The stock last traded at $98.51, up 0.5 percent on the session.