Zillow Group's (ZG) ability to meet 2025 growth estimates depends on the performance of its "enhanced market" strategy, and recent expansions would need to significantly underperform for the company to miss Street forecasts, RBC Capital Markets said in a report emailed Thursday.

RBC built a financial model to assess how enhanced markets contribute to Zillow's above-market growth. The analysis suggests that with an assumed 2.5% annual transaction value growth, non-enhanced markets would need to grow 6.8% to align with Street estimates for 2025.

Further rollouts in 2026 could allow non-enhanced markets to decline slightly while still meeting projections, according to the note.

The firm noted that early enhanced markets doubled their market share in two years, but new cohorts may see slower gains due to differences in rollout timing and prior product expansions. RBC also factored in Zillow's acquisitions and pricing actions, which contributed to 2024 growth but may not be recurring.

The firm said Zillow is positioned to grow despite fluctuating market conditions, supported by its enhanced market strategy and product improvements.

RBC has an outperform rating on Zillow, with a price target of $88.

Shares of Zillow Group were up 1.4% in recent Thursday trading.

Price: 69.85, Change: +1.00, Percent Change: +1.45