We raise our fair value estimate for wide-moat REA Group by 4% to AUD 126 per share following an update on the proposed acquisition of Rightmove, a United Kingdom-based online marketplace for property. Our upgrade consists, in around equal parts, of a 25% probability of the acquisition taking place and the time value of money.
REA Group, together with Domain, effectively operates a duopoly in residential real estate listings in Australia and REA Group is the dominant platform out of the two.
REA Group’s earnings are affected by the housing market, which is highly cyclical.
|
Metric
|
REA
|
DHG
|
SEK
|
|---|---|---|---|
Price/Earnings (Normalized) | 0.87 | 38.35 | 28.44 |
Price/Book Value | 17.18 | 1.81 | 3.43 |
Price/Sales | 15.55 | 5.08 | 8.17 |
Price/Cash Flow | 44.85 | 16.93 | 26.95 |
|
Metric
|
REA
|
DHG
|
SEK
|
|---|---|---|---|
Quick Ratio | 1.15 | 1.06 | 0.68 |
Current Ratio | 1.53 | 1.16 | 0.86 |
Interest Coverage | 20.00 | 5.75 | 0.44 |
|
Metric
|
REA
|
DHG
|
SEK
|
|---|---|---|---|
Return on Assets (Normalized) | 17.36% | 3.33% | 3.54% |
Return on Equity (Normalized) | 30.84% | 4.51% | 6.77% |
Return on Invested Capital (Normalized) | 24.42% | 4.42% | 5.57% |
|
1-Day Chart
|
Name
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Price
|
Morningstar Rating for Stocks
|
Capital Allocation
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Market Cap
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United States