REA +0.28%: Released their quarterly update today followed by an investor call which had a relatively muted reaction from the market.
Key highlights from the updates:
- Revenue grew in the quarter to A$413 million, up 21% yoy
- Free cashflow of A$74m, up 16% yoy
- Cost growth of 19% higher than expected
- Residential new buy listings up 12-14% across Sydney & Melbourne, up 7% among all locations yoy
The business is guiding to double digit yield growth and the residential housing market still looks strong. We spoke about an entry point of sub-$190 in the early September but the stock didn’t move low enough. The share price has climbed ~22% since it’s September low and we can’t justify buying the stock at current levels, with an implied 1 year forward p/e of 56.7x and a dividend yield of 1.0%.
- We like the business, but we’re not willing to pay up here, and still prefer Zillow (ZG US) in the US.
MM is cautiously bullish on REA
Add To Hit List
