Shares of ASX-listed Rea Group Ltd (AU:REA) plummeted 4.2% today despite the company posting healthy growth in the first half of Fiscal 2024. Revenue rose 18% year-over-year to AU$726 million while net profit jumped 22% to AU$250 million compared to H1 FY23. The company even raised its fully-franked (dividend on which tax is paid by the company) interim dividend by 16% to AU$0.87 per share. However, investors were still unimpressed due to the company’s dim outlook.
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Rea Group provides an online real estate listing platform and real estate-related services across Australia and Asia. REA shares have gained over 41% in the past year.
Rea’s First-Half Results
Rea’s H1 FY24 revenues were boosted by a 17% increase in the company’s business in Australia and a 21% growth in India revenues. The company even witnessed solid momentum in its Australia website visits, with 126.1 million average monthly visits and a 17% increase in active members. Also, online listings jumped 4% in the first half of 2024, backed by strong momentum in Sydney and Melbourne.
Looking ahead, management is cautious about witnessing similar listing growth in Sydney and Melbourne. Further, Rea raised its operating cost growth guidance to reach mid-to-high teens for the full year.
Is Rea a Good Investment?
Following the company’s first-half print, analysts from renowned research firms UBS and Citi retained their Hold rating on REA shares and kept their price targets unchanged.
Overall, REA stock has a Hold consensus rating based on two Buys, four Holds, and three Sell recommendations on TipRanks. The Rea Group Ltd share price forecast of AU$163.99 implies 7.4% downside potential from current levels.
