Last Update 06 Feb 26

Fair value Decreased 5.25%

RMV: Artificial Intelligence Execution Will Support Long Term Returns Despite Competitive Pressure

Narrative Update on Rightmove

Our analyst price target for Rightmove has been reduced from £6.57 to £6.23. This reflects recent cuts to Street targets in the £5.00 to £5.85 range, as analysts factor in higher discount rates, slightly different growth assumptions and the view that increased competition and investment in artificial intelligence may weigh on nearer term returns.

Analyst Commentary

Recent Street research on Rightmove has tilted more cautious, with multiple firms cutting ratings and trimming price targets into a £5.00 to £5.85 range. The common threads are concerns about execution risk around the new artificial intelligence driven strategy, pressure on nearer term profitability and a reassessment of how competitive pressure might affect growth and returns.

Bullish Takeaways

Bullish analysts see the artificial intelligence driven strategy as an attempt to support longer term growth, even if it means accepting lower profitability in the short term.
Targets in the £5.00 to £5.85 range still sit above some of the more cautious levels on the Street. This suggests there is room for upside in their view if execution on new products and data tools goes to plan.
The focus on artificial intelligence is viewed by some as an effort to strengthen the platform and defend share against rising competition over time, which they link to maintaining pricing power.
Where ratings are Neutral rather than Underweight, the message is that risks are more balanced, with valuation already reflecting a portion of the concerns on growth and margins.

Bearish Takeaways

Several bearish analysts have moved to Underweight and cut price targets sharply. Examples include JPMorgan moving from £6.27 to £5.55 and then to £5.00, and Morgan Stanley reducing its target from £8.15 to £5.10, indicating lower conviction in near term upside.
The repeated guidance reset cited by one bearish analyst, and the risk that it may not be the final one, raises questions about forecasting visibility and execution on management plans.
Intensified competition is a key concern, with some seeing a risk that rival offerings and pricing pressure could weigh on Rightmove’s growth profile and returns on invested capital.
UBS cutting its rating to Neutral alongside a target move from £8.79 to £5.85 reinforces the theme that the artificial intelligence driven plan could pressure profits in the nearer term, which feeds into more conservative models for cash generation and valuation multiples.

Valuation Changes

Fair Value: reduced slightly from £6.57 to £6.23.
Discount Rate: raised marginally from 8.51% to 8.59%.
Revenue Growth: adjusted slightly from 8.54% to 8.52%.
Net Profit Margin: nudged higher from 48.11% to 48.64%.
Future P/E: moved lower from 24.56x to 23.08x.

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

About Rightmove

Operates digital property advertising and information portal in the United Kingdom and internationally.What are the underlying business or industry changes driving this perspective?

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

How have these above catalysts been quantified?

Analysts are assuming Rightmove's revenue will grow by 10.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 49.7% today to 51.9% in 3 years time.
Analysts expect earnings to reach £283.0 million (and earnings per share of £0.39) by about September 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 25.3x on those 2028 earnings, down from 27.1x today. This future PE is lower than the current PE for the GB Interactive Media and Services industry at 27.1x.
Analysts expect the number of shares outstanding to decline by 1.51% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.16%, as per the Simply Wall St company report.

Rightmove Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

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

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of £7.694 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 £545.5 million, earnings will come to £283.0 million, and it would be trading on a PE ratio of 25.3x, assuming you use a discount rate of 8.2%.
Given the current share price of £7.16, the analyst price target of £7.69 is 6.9% higher. 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.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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