REA Group (REA.AX)
Communications · ASX · Australia
Fundamentals
Valuation and ratings
REA Group trades at A$163.20, which is 63% above the A$59.66 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 87 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 34.4 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About REA Group
REA Group Limited, together with its subsidiaries, engages in online property advertising business in Australia, Asia, and North America It provides property and property-related services on websites and mobile applications. The company operates residential, commercial, and share property sites, such as realestate.com.au, realcommercial.com.au, flatmates.com.au, property.com.au, housing.com, makaan.com, proptiger.com, and realtor.com. It is also involved in the provision of mortgage brokerage and home financing solutions; property data services; mortgage application and e-lodgement solutions for the broking and lending industries; commercial real estate information and technology; vendor paid advertising; digital non-bank lending solutions; and home loans. The company was formerly known as realestate.com.au Ltd. and changed its name to REA Group Limited in December 2008. REA Group Limited was incorporated in 1995 and is headquartered in Richmond, Australia. REA Group Limited operates as a subsidiary of News Corporation.
REA.AX passes 5 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Common questions
Is REA Group (REA.AX) undervalued?
Against our discounted cash flow estimate of A$59.66, REA.AX at A$163.20 is 63% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
What is REA.AX's P/E ratio?
REA.AX trades at 34.4 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.