On Friday, JPMorgan (NYSE:JPM) maintained its Underweight rating on Rightmove (OTC:RTMVY) Plc (RMV:LN) (OTC: RTMVY) with a consistent stock price target of GBP4.83. The firm's analysis followed Rightmove's Annual General Meeting (AGM) trading update, which led to adjustments in the company's financial model for the fiscal year 2024 (FY24).
The adjustments were made to account for a revised forecast in average revenue per advertiser (ARPA) and customer numbers as provided by the company.
Rightmove's updated guidance for FY24, which includes a projected revenue growth of 7%, aligns with JPMorgan's estimates, which are at the lower end of the company's own 7-9% growth forecast. The property portal's refined guidance was a result of a change in the mix of ARPA and customer numbers, which are key indicators of the company's performance.
Despite the adjustments, JPMorgan's underlying estimates for Rightmove remain unchanged. The firm anticipates that Rightmove will achieve a revenue increase of 7% in FY24. This estimate is based on the comprehensive review of the company's latest trading update and its implications for the future financial performance.
Furthermore, JPMorgan projects an underlying operating profit margin for Rightmove at 69.9% for FY24, which is just slightly below the company's own guidance of 70%. This margin is a critical measure of the company's profitability and efficiency in generating earnings from its operations.
The reaffirmation of the Underweight rating and the stock price target of GBP4.83 indicates JPMorgan's perspective on the stock's valuation and its expectations for the company's financial trajectory in the upcoming fiscal year. Rightmove's performance and outlook are closely monitored by investors as it is a significant player in the UK's online real estate market.
InvestingPro Insights
Investors considering Rightmove Plc (LON:RMV) (OTC: RTMVY) will find it pertinent to note the company's financial robustness and market performance as highlighted by current InvestingPro data. With a market capitalization of $5.54 billion and a P/E ratio of 22.34, Rightmove demonstrates a solid valuation foundation.
Still, the company's P/E ratio, adjusted for the last twelve months as of Q4 2023, stands at 21.91, indicating a slight discount to the unadjusted figure and suggesting potential investor caution regarding near-term earnings growth.
Rightmove's commitment to returning value to shareholders is evident through a notable dividend growth of 90.31% over the last twelve months as of Q4 2023, coupled with a current dividend yield of 2.37%. This aligns with one of the InvestingPro Tips, which highlights that the company has raised its dividend for three consecutive years.
Moreover, the company's trading update, indicating a revenue growth projection of 7% for FY24, is supported by a revenue growth of 9.53% over the last twelve months as of Q4 2023, showcasing a consistent upward trajectory.
For investors seeking more depth, there are additional InvestingPro Tips available, such as insights on the company's liquidity status and long-term profitability forecasts. For example, Rightmove holds more cash than debt on its balance sheet, and analysts predict the company will be profitable this year. To explore these insights further and to access a comprehensive suite of analytics, interested parties can visit InvestingPro and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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