Call Traders Check in on Zillow Stock After Earnings

Several analysts have raised their price targets in response

Assistant Editor
May 8, 2020 at 2:26 PM
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The shares of Zillow Group Inc (NASDAQ:ZG) are soaring today, up 15.8% to trade at $55.79, after the real estate service announced a better-than-expected first-quarter report. Following the news, no fewer than six analysts raised their price targets, the highest coming from Benchmark to $63. Looking ahead, the company plans to utilize technology that enables 3D home tours amid the coronavirus pandemic. 

Gapping higher on the charts in the past week, Zillow stock is hovering around the $55 region for the first time since the beginning of March. The equity has risen an impressive 42.3% in the last month, and is now up 19.6% year-to-date. However, the shares remain a distance off their Feb. 20 record high of $66.96.

Coming into today, seven out of 19 analysts sported a "strong buy," with 10 at a tepid "hold," and the remaining two split between a "strong sell" or "sell." Meanwhile, the 12-month consensus price target of $47.18 is a 13.5% discount to current levels. 

The upbeat report has triggered a frenzy in ZG's typically quiet options pits. At last check, over 2,000 calls have changed hands, volume running at nine times the average intraday amount and doubling the number of puts traded. Leading the charge is the May 45 call, while there are new positions being sold to open at the April 65 call.

While short interest has starting falling off, down 13.1% in the last reporting period, the 3.46 million shares sold short still account for 6% of the stock's available float. It would take a little over three days to cover these bearish bets at ZG's average pace of trading, an ample amount of buying power that could keep the wind at the stock's back.  

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