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Today (11 June) could be the day the FTSE 100 closes at a new all-time high. As I type, the index is at 8,860, which is just off its previous record of 8,871 set back in March.
This seems fitting, as trade talks between the US and China have just taken place in London over the past couple of days. Tensions appear to have been defused, which is good for a raft of large FTSE 100 firms that rely on frictionless global trade.
Since early April, the blue-chip index has made a rip-roaring recovery, rising 15.3%.
Property search giant
One FTSE 100 stock that has done even better is Rightmove (LSE: RMV), which has jumped 19% in this time. Over 12 months it’s up 39%, and around 132% over the past decade, not including rising dividends.
A bit like the FTSE 100, Rightmove is now a touch off its all-time high, set back in late 2021.
But might buying Rightmove stock today be the right move for investors? I certainly think it’s worth considering, for a number of reasons.
First, property professionals like residential and commercial estate letting agents and developers, pay a fee to advertise their properties on Rightmove. Therefore, as a UK-focused firm delivering digital services, it’s largely insulated from tariffs.
In May, CEO Johan Svanstrom said: “In the current uncertain global climate, our UK-focused, subscription-based and B2B-oriented business model means that we are comparatively well insulated from the volatility that some other companies and industries are having to contend with.“
Second, the company’s asset-light model means it’s spectacularly profitable. An underlying operating margin of 70% easily makes it one of the UK’s most profitable enterprises.
Next, Rightmove is the dominant force in its industry, commanding over 80% of all consumer time spent on UK property portals. Indeed, it attracts 4.1m unique visitors each day, with users spending around 45 minutes on average on the site.
I was one of those users the other day, dreamily looking at five-bedroom villas in Gibraltar that I will never be able to afford.
Another attractive feature here is a powerful network effect. Basically, the more estate agents that list their properties, the more attractive it becomes to buyers and renters who want the largest possible choice.
The combination of a powerful network effect and highly trusted brand gives Rightmove a potent competitive advantage.
Growth at a reasonable price
That said, one risk is rising competition, as smaller rivals like Zoopla and and OnTheMarket continue to snap at its heels. This is worth monitoring, as they could chip away at Rightmove’s market share and pricing power.
Despite its maturity though, Rightmove hasn’t stopped growing. It’s confident of delivering 8%-10% revenue growth in 2025, driven by new AI-powered tools and features that consumers and professionals are subscribing to.
Looking ahead, the UK government’s drive to build over 1m new homes by 2030 should be positive for Rightmove. This is a supportive trend for future online listings.
Finally, despite rising 20% year to date, the stock doesn’t look overvalued to me. It’s trading at a forward price-to-earnings ratio of 25, which I think is reasonable given how consistently profitable the firm is.
My view is that Rightmove will become more valuable over time, making the stock worth considering.
