ASX:REA

Stock Analysis Report

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Executive Summary

REA Group Limited engages in online property advertising business in Australia, Asia, and North America. More Details


Snowflake Analysis

High growth potential with adequate balance sheet.


Similar Companies

Share Price & News

How has REA Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: REA is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: REA's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

2.4%

REA

1.0%

AU Interactive Media and Services

0.5%

AU Market


1 Year Return

39.0%

REA

29.2%

AU Interactive Media and Services

0.9%

AU Market

Return vs Industry: REA exceeded the Australian Interactive Media and Services industry which returned 30.9% over the past year.

Return vs Market: REA exceeded the Australian Market which returned 1% over the past year.


Shareholder returns

REAIndustryMarket
7 Day2.4%1.0%0.5%
30 Day15.6%11.9%9.3%
90 Day28.3%22.8%12.3%
1 Year40.4%39.0%30.8%29.2%4.3%0.9%
3 Year94.3%87.5%67.3%58.9%23.0%7.9%
5 Year201.7%182.7%142.8%121.2%59.8%27.5%

Long-Term Price Volatility Vs. Market

How volatile is REA Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is REA Group undervalued compared to its fair value and its price relative to the market?

169.65x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: REA (A$144.74) is trading above our estimate of fair value (A$67.83)

Significantly Below Fair Value: REA is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: REA is poor value based on its PE Ratio (169.7x) compared to the XX Interactive Media and Services industry average (35.5x).

PE vs Market: REA is poor value based on its PE Ratio (169.7x) compared to the Australian market (22.7x).


Price to Earnings Growth Ratio

PEG Ratio: REA is poor value based on its PEG Ratio (6.5x)


Price to Book Ratio

PB vs Industry: REA is overvalued based on its PB Ratio (22.1x) compared to the AU Interactive Media and Services industry average (7.4x).


Next Steps

Future Growth

How is REA Group forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

26.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: REA's forecast earnings growth (26.3% per year) is above the savings rate (2.3%).

Earnings vs Market: REA's earnings (26.3% per year) are forecast to grow faster than the Australian market (18.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: REA's revenue (10.4% per year) is forecast to grow faster than the Australian market (5.1% per year).

High Growth Revenue: REA's revenue (10.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: REA's Return on Equity is forecast to be high in 3 years time (35.6%)


Next Steps

Past Performance

How has REA Group performed over the past 5 years?

-7.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: REA has a large one-off loss of A$148.6M impacting its June 30 2020 financial results.

Growing Profit Margin: REA's current net profit margins (12.7%) are higher than last year (11.2%).


Past Earnings Growth Analysis

Earnings Trend: REA's earnings have declined by 7.4% per year over the past 5 years.

Accelerating Growth: REA's earnings growth over the past year (6.2%) exceeds its 5-year average (-7.4% per year).

Earnings vs Industry: REA earnings growth over the past year (6.2%) exceeded the Interactive Media and Services industry 1.1%.


Return on Equity

High ROE: REA's Return on Equity (13%) is considered low.


Next Steps

Financial Health

How is REA Group's financial position?


Financial Position Analysis

Short Term Liabilities: REA's short term assets (A$373.1M) exceed its short term liabilities (A$317.8M).

Long Term Liabilities: REA's short term assets (A$373.1M) do not cover its long term liabilities (A$408.3M).


Debt to Equity History and Analysis

Debt Level: REA's debt to equity ratio (27.7%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if REA's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: REA's debt is well covered by operating cash flow (175.2%).

Interest Coverage: REA's interest payments on its debt are well covered by EBIT (85.6x coverage).


Balance Sheet


Next Steps

Dividend

What is REA Group current dividend yield, its reliability and sustainability?

0.76%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: REA's dividend (0.76%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.03%).

High Dividend: REA's dividend (0.76%) is low compared to the top 25% of dividend payers in the Australian market (5.02%).


Stability and Growth of Payments

Stable Dividend: REA is not paying a notable dividend for the Australian market, therefore no need to check if payments are stable.

Growing Dividend: REA is not paying a notable dividend for the Australian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: REA is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of REA's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.7yrs

Average management tenure


CEO

Owen Wilson (56 yo)

1.92yrs

Tenure

AU$2,163,092

Compensation

Mr. Owen James Wilson, BCom, ACA, GAICD, serves as Chief Executive Officer and Executive Director at REA Group Limited since January 7, 2019. Mr. Wilson had been the Chief Financial Officer of REA Group Li...


CEO Compensation Analysis

Compensation vs Market: Owen's total compensation ($USD1.61M) is below average for companies of similar size in the Australian market ($USD3.65M).

Compensation vs Earnings: Owen's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Owen Wilson
CEO & Executive Director1.92yrsAU$2.16m0.0091%
A$ 1.7m
Janelle Hopkins
Chief Financial Officer1.5yrsAU$1.60mno data
Tomas Varsavsky
Chief Technology & Data Officer1.17yrsno datano data
Tamara Kayser
General Counsel & Company Secretary0.083yrno datano data
Natalie Cerny
Head of Corporate Affairs & Communicationsno datano datano data
Melina Cruickshank
Chief Marketing & Audience Officer2yrsno datano data
Kul Singh
Chief Sales Officer0.92yrno datano data
Mary Lemonis
Chief People Officer2.75yrsno datano data
Val Brown
Chief Consumer Product Officer1.17yrsno datano data
Graham Curtin
Executive Manager of Financial Reportingno datano datano data
Henry Ruiz
CEO – REA Group Asia and Chief Strategy & Customer Product Officer3.75yrsAU$1.39mno data
Kerry Wong
Chief Executive Officer of Greater China3.33yrsno datano data

1.7yrs

Average Tenure

Experienced Management: REA's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Owen Wilson
CEO & Executive Director1.92yrsAU$2.16m0.0091%
A$ 1.7m
Richard Freudenstein
Non-Executive Director14.08yrsAU$221.00k0.0011%
A$ 214.5k
Kathleen Conlon
Independent Non-Executive Director13.5yrsAU$238.01k0.0017%
A$ 327.6k
Hamish McLennan
Non-Executive Chairman of the Board8.67yrsAU$495.01k0.00083%
A$ 159.0k
Tracey Fellows
Non-Executive Director6.33yrsAU$1.56m0.0056%
A$ 1.1m
Michael Miller
Non-Executive Director5.08yrsno datano data
Nick Dowling
Independent Non-Executive Director2.58yrsAU$200.00k0.00033%
A$ 63.2k
Marygrace DeGrazio
Alternate Director0.58yrno datano data

5.7yrs

Average Tenure

54.5yo

Average Age

Experienced Board: REA's board of directors are considered experienced (5.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

REA Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: REA Group Limited
  • Ticker: REA
  • Exchange: ASX
  • Founded: 1995
  • Industry: Interactive Media and Services
  • Sector: Media
  • Market Cap: AU$19.155b
  • Shares outstanding: 131.71m
  • Website: https://www.rea-group.com

Number of Employees


Location

  • REA Group Limited
  • 511 Church Street
  • Richmond
  • Victoria
  • 3121
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
REAASX (Australian Securities Exchange)YesOrdinary SharesAUAUDDec 1999
REACHIA (Chi-X Australia)YesOrdinary SharesAUAUDDec 1999
RPGR.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDDec 1999
R9CDB (Deutsche Boerse AG)YesOrdinary SharesDEEURDec 1999
RPGR.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDOct 2014

Biography

REA Group Limited engages in online property advertising business in Australia, Asia, and North America. It offers property and property-related services on websites and mobile apps. The company operates r...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/04 07:04
End of Day Share Price2020/12/04 00:00
Earnings2020/06/30
Annual Earnings2020/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.