He acted on the strength of Zillow’s home-sales division, Home, The Fly reports.
Walmsley increased the valuation of that operation using the valuation of OpenDoor, which buys and sells homes, as a comparison.
And that in turn gives insight into the value of Zillow Home, a segment "where most investors, today, attribute little value," Walmsley said.
Zillow recently traded at $94.90, up 4.1%. The shares had nearly doubled in 2020 through Tuesday, as the home market has surged during the coronavirus pandemic.
Earlier this month, Walmsley raised his rating on the company to buy from hold and lifted his share-price target to $106 from $75.
Earnings estimates have "meaningful upside" potential, and numerous factors can push the stock higher, Walmsley said in a commentary cited by The Fly.
Zillow has pushed its Premier Agent business "back on a stable footing," Walmsley said. It now has better lead generation for agents, and conversion of those leads can boost revenue over the next year, he said.
Seller leads from the Zillow Offers business also will probably create a "healthy" revenue share next year, Walmsley said.
In its second-quarter report, Zillow said its loss widened from a year earlier, but that loss was smaller than analysts had estimated.