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REA Group Ltd (AU:REA)
ASX:REA
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REA Group Ltd
(Sydney:REA)
75Outperform
REA Group Ltd (REA) vs. S&P 500 (SPY)
Market Cap
$29.98B
Dividend Yield0.87%
Average Volume (3M)215.14K
Price to Earnings (P/E)48.6
Beta (1Y)1.38
Revenue Growth20.44%
EPS Growth-14.93%
CountryAU
Employees3,406
SectorCommunication Services
Sector Strength78
IndustryInternet Content & Information
Share Statistics
EPS (TTM)4.67
Shares Outstanding132,117,220
10 Day Avg. Volume155,739
30 Day Avg. Volume215,136
Financial Highlights & Ratios
PEG Ratio0.41
Price to Book (P/B)N/A
Price to Sales (P/S)12.96
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$259.13Price Target Upside18.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
REA Group Ltd Business Overview & Revenue Model
Company DescriptionREA Group Ltd (REA) is a leading digital advertising company specializing in property and real estate services. It operates primarily in the online real estate sector, providing digital platforms where consumers can buy, sell, or rent properties. REA's core products and services include residential, commercial, and share property listings, as well as property-related financial services and market research tools.
How the Company Makes MoneyREA Group Ltd generates revenue primarily through its online property listing services. The company's key revenue streams include subscription fees paid by real estate agents and property developers to list properties on REA's platforms, advertising fees from property developers and other businesses seeking to reach REA's audience, and revenue from financial services offered through its platforms, such as mortgage brokering and home loan comparison tools. Additionally, REA benefits from strategic partnerships with media companies and real estate agencies, which help expand its reach and enhance its service offerings. The company's earnings are also supported by its investments in technology and data analytics, which enhance user engagement and attract more advertisers.
REA Group Ltd Financial Statement Overview
Summary
REA Group Ltd shows a solid financial position with strong revenue and cash flow growth, supported by a stable balance sheet. While profitability margins have faced some pressure, the company's overall financial health is robust, with good cash generation and manageable leverage.Income Statement
The company exhibits strong revenue growth, with a noticeable increase from the previous year. The gross profit margin is robust, indicating efficient cost management. However, the net profit margin has decreased slightly, highlighting some pressures on the bottom line.85
Very Positive
Balance Sheet
The balance sheet shows moderate leverage with a manageable debt-to-equity ratio. Stockholders' equity has grown, enhancing financial stability. However, a closer watch on the debt levels would ensure sustained equity growth.78
Positive
Cash Flow
Operating cash flow is strong, outpacing net income, which indicates good cash generation. The free cash flow has grown, supporting potential reinvestments or debt reduction. However, capital expenditures slightly impact free cash flow growth.80
Positive
| Breakdown | ||||
| Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.68B | 1.39B | 1.43B | 1.01B | 881.86M |
| Gross Profit | ||||
| 1.08B | 636.50M | 598.00M | 498.40M | 441.97M |
| EBIT | ||||
| 688.20M | 548.30M | 556.20M | 460.10M | 409.26M |
| EBITDA | ||||
| 651.40M | 640.60M | 649.30M | 544.90M | 335.31M |
| Net Income Common Stockholders | ||||
| 302.80M | 356.10M | 384.80M | 322.68M | 112.37M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 205.10M | 259.80M | 248.20M | 168.90M | 222.84M |
| Total Assets | ||||
| 2.65B | 2.63B | 2.57B | 2.36B | 1.59B |
| Total Debt | ||||
| 281.20M | 403.20M | 487.00M | 495.60M | 327.15M |
| Net Debt | ||||
| 77.00M | 143.40M | 238.80M | 326.70M | 104.31M |
| Total Liabilities | ||||
| 1.08B | 1.11B | 1.21B | 1.22B | 726.03M |
| Stockholders Equity | ||||
| 1.54B | 1.47B | 1.30B | 1.07B | 864.12M |
| Cash Flow | Free Cash Flow | |||
| 464.40M | 355.10M | 392.60M | 254.50M | 345.79M |
| Operating Cash Flow | ||||
| 589.40M | 472.70M | 487.60M | 321.40M | 419.15M |
| Investing Cash Flow | ||||
| -205.20M | -133.60M | -194.70M | -381.50M | -101.17M |
| Financing Cash Flow | ||||
| -439.40M | -329.30M | -219.40M | 11.90M | -233.52M |
REA Group Ltd Technical Analysis
Negative
219.55
Price Trends
243.75
Negative
242.25
Negative
223.64
Positive
Market Momentum
-4.19
Positive
40.01
Neutral
56.21
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:REA, the sentiment is Negative. The current price of 219.55 is below the 20-day moving average (MA) of 235.78, below the 50-day MA of 243.75, and below the 200-day MA of 223.64, indicating a neutral trend. The MACD of -4.19 indicates Positive momentum. The RSI at 40.01 is Neutral, neither overbought nor oversold. The STOCH value of 56.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:REA.
REA Group Ltd Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $29.98B | 48.58 | 37.91% | 0.87% | 20.44% | -14.93% | |
71 Outperform | €12.21B | 47.59 | 8.51% | 2.38% | 40.64% | -63.23% | |
68 Neutral | AU$2.74B | 50.82 | 4.88% | 1.39% | 13.16% | 62.71% | |
59 Neutral | $27.87B | 0.90 | -19.24% | 4.15% | 2.11% | -44.59% | |
48 Neutral | $7.49B | ― | -2.06% | ― | 11.58% | -51.09% | |
45 Neutral | $7.94B | 1,225.27 | 1.71% | 1.63% | -11.52% | -109.88% | |
41 Neutral | AU$6.30M | ― | -52.89% | ― | ― | 67.06% |
* Communication Services Sector Average
Performance Comparison
AU:REA
REA Group Ltd
219.55
35.44
19.25%
AU:SEK
Seek Limited
21.40
-2.79
-11.54%
AU:NXT
Nextdc Limited
11.31
-5.85
-34.11%
AU:CAR
CAR Group
31.49
-3.44
-9.85%
AU:MEG
Megado Gold Ltd.
0.02
0.01
100.00%
AU:DHG
Domain Holdings Australia Ltd.
4.26
1.03
31.89%
REA Group Ltd Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -13.48% | Next Earnings Date: May 9, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with significant revenue and audience growth and strategic investments in key areas like financial services and REA India. However, challenges such as the failed Rightmove acquisition and issues in the U.S. market were noted.Highlights
Record Revenue and EBITDA Growth
REA Group reported a revenue increase of 21% to $413 million and an EBITDA growth of 23% to $243 million for Q1 2025.
Residential and Commercial Listings Surge
Listings were up year-on-year, with Brisbane and Perth matching the growth in Sydney and Melbourne, contributing to strong performance in the residential and commercial sectors.
Increased Audience Engagement
Reaching a record 11.9 million monthly visitors on realestate.com.au, with over 1 million logged-in members in a single day.
Strong Growth in Financial Services
Financial Services achieved a 13% year-on-year increase in submission volumes and strong revenue growth driven by Mortgage Choice Freedom.
REA India Revenue Growth
REA India reported a 42% increase in revenue, driven by Housing Edge platform strength and the core Housing.com business.
Lowlights
Rightmove Acquisition Withdrawal
REA Group had to withdraw its bid for Rightmove due to lack of engagement, incurring $18 million in one-off legal costs.
PropTiger Revenue Decline
PropTiger revenues were impacted by strong property market conditions leading to less need for developer brokers.
Challenging U.S. Market Conditions
The group's associate, Move, faced a 1% decline in revenue due to continued challenging market conditions in the U.S.
Company Guidance
During the REA Group's Q1 2025 earnings call, the executives reported robust financial performance with revenue rising by 21% to $413 million and EBITDA up by 23% to $243 million, excluding associates. The company experienced double-digit yield growth and a significant increase in listings, with residential buy yield growing by 15%. The platform's audience also expanded, achieving a record 11.9 million monthly visitors. Additionally, seller lead volumes surged by 80% year-on-year, while Pro subscription uptake grew by 28%. In the financial services segment, submission volumes increased by 13%, and REA India saw a revenue boost of 42%. Despite the strong performance, there was a 1% geo mix drag in yield, and the company's attempted acquisition of Rightmove was unsuccessful.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.