Digital Recruitment And AI Will Reshape Asia And ANZ Markets

Key Takeaways

• AI-driven innovation, integrated platforms, and freemium migration are boosting yield, user engagement, and margin expansion, supporting robust long-term revenue and earnings growth.
  
• Under-penetration and digital adoption in Asian markets present a significant, potentially undervalued growth catalyst as SEEK strengthens position beyond core regions.
  
• Reliance on new pricing models, innovation, and expansion faces revenue uncertainty, rising operational costs, and market pressures that threaten profitability and long-term growth.

Catalysts

Provides online employment marketplace services in Australia, New Zealand, Southeast Asia, Hong Kong, the United Kingdom, Europe, and internationally.

• The ongoing digitisation of recruitment, increased adoption of online marketplaces for both traditional and flexible/gig work, and SEEK's continued product innovation (including automation and AI-driven personalised job matching, verified identity and trust features, and high engagement mobile adoption) are structurally expanding user engagement and transactional activity. This is expected to drive higher job ad volumes, application rates, and average revenue per user, supporting accelerated revenue growth and improved operating leverage over the long term.
  
• The growth in remote and flexible work, and SEEK's full ownership and deeper integration of platforms like Sidekicker, position the company to capture increasing demand for on-demand, cross-border, and gig/portfolio work opportunities-broadening its addressable market and monetisation potential across SMEs and enterprise clients, contributing to both sustained revenue and earnings growth.
  
• The business is rapidly increasing its monetisation efficiency via variable/advanced ad pricing, premium performance features, and migration to a freemium model in high-growth Asian markets, which together are driving yield expansion even in periods of flat or declining job ad volumes. This model both defends margins and sets a foundation for outsized earnings growth as ad volumes and macro conditions recover.
  
• Continued strategic investment in AI, data analytics, and integrated HR solutions enables SEEK to diversify beyond job ads into higher-margin value-added services such as talent insights, guided candidate placement, and workforce analytics. This drives margin expansion, strengthens client retention, and grows long-term customer value, positively impacting net margins and the stability of recurring earnings.
  
• Asia remains under-penetrated relative to SEEK's core ANZ business; ongoing yield optimisation, market share gains, and the near completion of the freemium rollout are expected to materially lift revenue and profit contribution from this region as internet/formal employment channels develop, presenting a potentially underpriced growth catalyst for group earnings in the company's current valuation.

SEEK Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming SEEK's revenue will grow by 11.2% annually over the next 3 years.
• Analysts assume that profit margins will increase from 21.7% today to 21.9% in 3 years time.
• Analysts expect earnings to reach A$330.8 million (and earnings per share of A$0.89) by about September 2028, up from A$238.3 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting A$376.1 million in earnings, and the most bearish expecting A$257.7 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 40.9x on those 2028 earnings, up from 39.8x today. This future PE is lower than the current PE for the AU Interactive Media and Services industry at 46.4x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.86%, as per the Simply Wall St company report.

SEEK Future Earnings Per Share Growth

Risks

• The shift to a freemium model in Asia, while showing initial promise, has yet to demonstrate consistent double-digit revenue growth, and paid ad volumes declined 16% this year, creating ongoing uncertainty around sustainable revenue uplift and monetisation in key growth markets, which may weigh on long-term group earnings and revenue growth.
  
• Macroeconomic job ad volumes in Australia and New Zealand (ANZ) declined by 11%, and management's guidance assumes volumes remain flat; prolonged stagnation or further contraction in job ad volumes due to economic or labor market weakness would cause revenue growth to deteriorate, undermining net margins and earnings momentum.
  
• The heavy reliance on yield increases and product innovation to offset volume declines (e.g., through advanced ads and variable pricing in ANZ) is not guaranteed to be repeatable at current rates, and long-term high single-digit yield growth targets may become difficult to achieve in more competitive or commoditized market environments, which would impact SEEK's revenue trajectory and profitability.
  
• Expanding investment in AI, data infrastructure, product development, and the acquisition/scale-up of Sidekicker-while necessary for competitiveness-risks escalating operational costs; if anticipated revenue synergies and productivity gains do not materialize, this will compress net margins and limit EPS growth.
  
• The increasing prevalence of direct employer recruitment channels, sector-specific job platforms, and potential regulatory changes (e.g., data privacy, algorithm oversight) may reduce SEEK's market share and pricing power, leading to structural revenue pressures and higher compliance and technology costs that could erode long-term profitability and returns.

Valuation

• The analysts have a consensus price target of A$30.275 for SEEK based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of A$32.5, and the most bearish reporting a price target of just A$22.6.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be A$1.5 billion, earnings will come to A$330.8 million, and it would be trading on a PE ratio of 40.9x, assuming you use a discount rate of 7.9%.
• Given the current share price of A$26.61, the analyst price target of A$30.28 is 12.1% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.