Property Digitization And AI Rollout Will Transform Real Estate

Key Takeaways

• Leading platform engagement and ongoing digital innovation are driving higher user traffic, advertiser demand, and enhanced monetization opportunities.
  
• Expansion into new verticals and uptake of premium agent packages are reducing reliance on the resale market and strengthening diversified, high-margin growth.
  
• Reliance on UK market, customer churn, low-value onboarding, fierce competition, and slower innovation threaten Rightmove's growth, margins, and ability to diversify revenues.

Catalysts

Operates digital property advertising and information portal in the United Kingdom and internationally.

• The ongoing digitization of property search and transactions, combined with Rightmove's market-leading engagement (second highest time on site ever, 85% direct/organic traffic, and strong brand saliency), supports continued migration of consumers and agents to its platform, likely increasing traffic, advertiser demand, and thus top-line revenue growth.
  
• Rightmove is accelerating the rollout of AI-enabled tools and personalized digital features, leading to higher consumer engagement and improved monetization of proprietary user data; early-stage initiatives (like AI-powered mortgage tools, automated valuation models, and conversational search) are expected to increase ARPA and create new high-margin revenue streams, positively impacting both revenue and net margins in the medium to long term.
  
• Expansion into adjacent verticals (mortgages, rental services, and commercial), where revenue growth is already notably strong (+100% in mortgages, +34% in rental services, and +14% in commercial), demonstrates tangible progress towards building diversified, multi-segment revenue streams, reducing reliance on the UK resale market and underpinning long-term earnings growth potential.
  
• Uptake in premium/value-added agent packages and products (e.g., Optimiser Edge, Ascend, and discretionary product spend), combined with high retention (highest in over 10 years) and increasing partner engagement, shows Rightmove's pricing power and ability to drive double-digit ARPA growth, which directly supports top-line revenue and profit growth.
  
• Continued consolidation in the digital real estate portal sector and increasing integration of end-to-end digital solutions (e.g., Lead to Keys, digitized homebuying) reinforce network effects, consumer stickiness, and Rightmove's competitive moat-sustaining high operating leverage and supporting industry-leading net margins over the long term.

Rightmove Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Rightmove's revenue will grow by 10.1% annually over the next 3 years.
• Analysts assume that profit margins will increase from 49.7% today to 52.0% in 3 years time.
• Analysts expect earnings to reach £283.9 million (and earnings per share of £0.39) by about August 2028, up from £203.7 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 25.0x on those 2028 earnings, down from 31.2x today. This future PE is lower than the current PE for the GB Interactive Media and Services industry at 25.6x.
• Analysts expect the number of shares outstanding to decline by 2.19% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.18%, as per the Simply Wall St company report.

Rightmove Future Earnings Per Share Growth

Risks

• Persistent new agent churn and lower initial ARPA (Average Revenue Per Advertiser) from new joiners-nearly 40% of new agents exit within two years and most start on the lowest package-could limit sustainable ARPA growth and slow top-line revenue over the longer term.
  
• Recent revenue gains in strategic growth areas (commercial, mortgages, rental) are partly driven by signing up smaller clients and new partners at lower price points, which has a dilutive effect on ARPA; this trend may cap margin expansion and slow earnings leverage if upselling and product penetration do not outpace customer mix dilution.
  
• Rightmove's limited international exposure leaves it highly dependent on the UK property market; any prolonged stagnation, structural decline, or government policy shift (e.g., housing supply constraints, changes in stamp duty, or regulations such as tenant fee bans) would directly threaten revenue, cash flow, and earnings growth.
  
• Increasing competition from alternative digital property platforms and well-resourced rivals ramping up product launches, digital marketing, and differentiated business models (as seen with aggressive moves by CoStar/OnTheMarket and Zoopla) poses a risk of fragmenting traffic, eroding Rightmove's lead, and compressing net margins over time.
  
• The industry's rapid evolution toward end-to-end digital real estate transactions and more aggressive consumer monetization (notably present in international peers) may outpace Rightmove's measured, incremental innovation strategy; consumer and partner expectations for modern, seamless services could shift faster than Rightmove adapts, raising longer-term risks to ARPA growth, platform engagement, and revenue diversification.

Valuation

• The analysts have a consensus price target of £7.79 for Rightmove 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 £9.87, and the most bearish reporting a price target of just £4.85.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be £545.8 million, earnings will come to £283.9 million, and it would be trading on a PE ratio of 25.0x, assuming you use a discount rate of 8.2%.
• Given the current share price of £8.24, the analyst price target of £7.79 is 5.8% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
• 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.