A share price pullback from peaks at Rightmove (RMV) presents a compelling entry point for investors eager to add a high-quality, asset-light and resilient growth business to portfolios. As an advertising platform, the UK’s biggest property portal is more exposed to estate agent budgets than house prices and transactions, lending Rightmove some protection from the sluggish UK economy.
Nevertheless, interest rate cuts by the Bank of England should help the UK housing market and deliver a tailwind for Rightmove, whose shares trade below a final takeover offer of 780p from Australian property listings company REA Group (REA:ASX), which the company rebuffed a year ago.
Steered by CEO Johan Svanstrom, Rightmove provides advertising for UK estate agents and new home developers and is the market leader in the UK property portal patch. Berenberg observes that the £5.6 billion cap is in ‘a strong defensive position, with challenges from rivals failing to take meaningful market share’.
Eric Burns, fund manager at Sanford DeLand, tells Shares there is ‘a textbook network effect at play’ at Rightmove, whereby ‘the more homes it lists on the site, the more house hunters use it to search for properties, which in turn leads to more listings. It has become so ubiquitous in the property market that estate agents cannot afford to withdraw from it - even in a tough market. As a result, with the exception of the Covid period, it has grown earnings per share every year since its IPO in 2006.’
Rightmove’s results (25 July) for the half to June 2025 came in a smidge ahead of consensus expectations with revenue up 10% year-on-year to £211.7 million and underlying operating profit increased by 9% to £151.3 million, meaning the asset-light platform company achieved an enviable 71.4% margin.
Crucially, the results revealed little impact on Rightmove from CoStar’s (CSGP:NASDAQ) entry into the market following its 2023 acquisition of OnTheMarket with Rightmove’s key Strategic Growth Areas (SGAs) gaining traction. Rightmove reiterated its full-year 2025 guidance for revenue growth of 8% to 10% and reported sustained traffic growth with a total of 9.1 billion minutes spent on the platform in the half, the second-highest on record.
Rightmove said technology innovation and AI usage had accelerated in the period, and the company has also launched a new product called Ascend to help developers of new builds compete for buyers.
Based on Berenberg’s year-to-December 2025 and 2026 earnings per share estimates of 29.7p and 33.5p respectively, Rightmove trades on a forward price-to-earnings ratio of 24.5 times falling to 21.6 on next year’s numbers. While not optically cheap, this is still a discount to the ratings of European platform peers which seems unwarranted given Rightmove’s improving earnings growth profile, and the company is also returning surplus cash to shareholders through a progressive dividend and earnings-enhancing buybacks.
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
magazine
