Last week, you might have seen that Zillow Group, Inc. (NASDAQ:ZG) released its first-quarter result to the market. The early response was not positive, with shares down 7.6% to US$39.19 in the past week. Revenues were a bright spot, with US$529m in revenue arriving 4.2% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.10, some 7.5% below consensus predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the consensus forecast from Zillow Group's 27 analysts is for revenues of US$2.16b in 2024. This reflects an okay 7.6% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 37% to US$0.43. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$2.18b and losses of US$0.30 per share in 2024. So it's pretty clear the analysts have mixed opinions on Zillow Group even after this update; although they reconfirmed their revenue numbers, it came at the cost of a sizeable expansion in per-share losses.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 10% to US$55.43, with the analysts signalling that growing losses would be a definite concern. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Zillow Group, with the most bullish analyst valuing it at US$77.00 and the most bearish at US$35.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Zillow Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 10% annualised growth until the end of 2024. If achieved, this would be a much better result than the 6.1% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 11% per year. So it looks like Zillow Group is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Zillow Group's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Zillow Group going out to 2026, and you can see them free on our platform here.

Even so, be aware that Zillow Group is showing 1 warning sign in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.