RMV: Artificial Intelligence Will Drive Future Efficiency Despite Competitive Pressures

The analyst price target for Rightmove has been reduced modestly, reflecting analysts' reassessment of the shares amid lowered Street targets in the 500 to 585 GBp range and concerns over intensifying competition and near-term profit pressure from its new AI-driven strategy.

Analyst Commentary

Street research on Rightmove has turned more cautious overall, with most recent actions centered on target cuts and rating downgrades as analysts factor in execution risk around the AI driven strategy and a more competitive landscape. However, a minority of voices remain constructive on the company’s long term positioning and cash generation, supporting a still elevated absolute valuation.

Bullish Takeaways

• Bullish analysts highlight that the AI led roadmap, while disruptive in the near term, could ultimately deepen Rightmove’s competitive moat by enhancing lead quality, pricing power, and product differentiation.
• The uplift in at least one price target toward the mid 800 GBp range reflects confidence that the platform can sustain solid medium term revenue growth and margin resilience once the investment phase normalizes.
• Supportive voices point to Rightmove’s strong balance sheet and cash generation as key buffers that allow it to absorb temporary profit pressure while still investing behind structural growth initiatives.
• Some observers argue that, even with revised assumptions, the shares offer a reasonable risk reward profile if management executes well on AI monetization and maintains share in core agency listings.

Bearish Takeaways

• Bearish analysts have aggressively lowered price targets into the 500 to 585 GBp range, arguing that prior expectations for growth and profitability were too optimistic relative to rising competitive intensity.
• Multiple downgrades to Neutral or Underweight reflect concern that the new AI driven strategy will depress near term earnings, compress valuation multiples, and delay any re rating of the shares.
• Cautious views emphasize the risk that current guidance resets may not be final, particularly if competitive pressures force further investment or pricing concessions to defend market share.
• Some see the step down from previously much higher targets as evidence that execution risk around technology rollouts and customer adoption is underappreciated, limiting upside even after the sell off.

What's in the News

• Reaffirmed 2025 guidance, with revenue expected to grow around 9% within the existing 8% to 10% range and an underlying operating margin target of 70% (Company guidance)
• Issued new 2026 outlook, guiding for revenue growth of 8% to 10% and underlying operating profit growth of 3% to 5%, reflecting higher investment in AI and product initiatives (Company guidance)

Valuation Changes

• Discount Rate edged down slightly from 8.48 percent to 8.46 percent, implying a marginally lower perceived risk profile in the updated model.
• Revenue Growth was reduced modestly from 8.56 percent to 8.54 percent, signaling a small tempering of medium term top line expectations.
• Net Profit Margin was lowered slightly from 48.26 percent to 48.11 percent, reflecting a minor increase in expected cost intensity or investment spend.
• Future P/E eased fractionally from 24.55 times to 24.53 times, indicating a near unchanged but very slightly less demanding valuation multiple.
• Fair Value was trimmed marginally from 6.60 pounds to 6.57 pounds per share, capturing the combined effect of small downward tweaks to growth and profitability assumptions.