Craig-Hallum analyst Brad Berning believes Zillow's Flex model has the potential, if executed, to provide material upside to the company's business model of up to a 70% increase in unit economics while the PA 4.1 lead generation approach also offers material upside to double its lead close rate for used home sales market share. Further, the analyst thinks that the confusion in the market has led to a substantial risk premium priced into the stock versus what he believes will be a likely substantially higher revenues simply under the move to PA 4.1 and materially higher unit economics on Flex, if Zillow is able to execute on nationwide basis. Berning has a Buy rating and $55 price target on the shares.

Jefferies raised the firm's price target on Zillow to $77 from $75 and keeps a Buy rating on the shares. The firm expects upside in Q1, though higher mortgage rates and softer housing data exiting the quarter could encourage Zillow to guide Q2 conservatively. Still, the firm sees tailwinds from new products driving upside to consensus in the coming years, the analyst added in a preview note for the U.S. Internet group.