Rightmove shares are expensive – but worth it because of the portal’s market dominance.
Writing in the Questor ‘stock picks’ column in the Daily Telegraph, Robert Stephens said that Rightmove provides simplicity and convenience for home hunters, for whom it might be their first or only port of call.
Describing the company’s dominance of the online property listings market as “exceptional”, he said that despite the best efforts of rivals Zoopla and OnTheMarket, Rightmove has 76% of mobile and desktop traffic.
He said that there could be “significant long-term profit growth” and praised its innovation.
Stephens said: “It continues to refine features such as its ‘best price guide’ which helps estate agents to gather comparable properties to support their suggested valuation.
“It saves them up to 45 minutes per market appraisal, thereby improving their efficiency.”
The article states that features such as “discover” provide additional leads to agents, “many of whom have come to rely on the online property listings business to generate sales”.
The article goes on: “A captive audience offers Rightmove significant opportunities to sell more expensive services.”
Stephens says that it isn’t just agents who are dependent on Rightmove – home hunters are too.
He says that Rightmove has a further growth opportunity in the form of its tenant passport, while its acquisition of referencing firm Van Mildert could augment its tenant offering.
While Rightmove trades at 30.3 times its expected earnings, making the shares look expensive, Stephens argues that it is poised to deliver consistently high profit growth.
He gives it a buy rating.
Yesterday, Rightmove shares closed slightly up at 598p.
Comments (7)
Saves 45 minutes? Did they survey agents? If so are the ones in question simply chucking a best price guide at the vendor and saying pick a price?
I get this is a RM PR spin but jeez…
Next months reading should be interesting as we enter the seasonal bleating and whining about the new take it or leave it rate card but as sheep go, you’ll take it and continue to whine anyway.
By the way, a saving of 45 minutes on a val!!!!
REALLY!!!
So how, by not turning up!
The cynical me thinks that the new Best Price Guide is just another way for RM to sell data to third parties. It always worries me when I put in the actual property address as to what will happen with it later. 45 minutes 🙂
Totally agree
Just don’t do it. I just put a street name in and explain to clients that I am stopping their data from being sold on and they are extremely grateful, especially as competitors do put the full address on.
RM has reached its price point. No extra value added. Agents are slowly waking up and coming away from them.
We left in July 2017. It makes no difference to business.
If all the independents removed their properties from RM then RM would collapse. Agents should give it a go.
Under current market conditions it makes no difference if you are on a portal or not – it’s pure negotaitaing and on the phone EA techniques which get deals done.
Don’t get shafted by RM, remove your properties from RM and test the portal market, that’s if you are too scared to give notice to RM.
Robert?
Rightmove is an overpriced digital newspaper.
It’s Annual Price Hikes for Subscribers are often unjustified and no more than blatant profit taking by force.
Rightmove doesn’t sell houses, Estate Agents sell houses.
Rightmove is less effective now than it was in the past.
Rightmove needs to change its attitude to its Subscribers or they will continue to leave in even greater numbers.
Estate Agents are much less reliant on Rightmove now than they were in the past.
Homebuyers are much more savvy regarding property searching and Rightmove is no longer perceived by them as the main method of finding their next home.
On many levels, Rightmove’s days are numbered, unless they change!