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The Rightmove (LSE:RMV) share price fell in early trading on Friday (25 July) after the UK’s leading online property portal reported its results for the first half of the year. While the company performed well in H1, beating estimates, investors responded cautiously due to soft guidance for the back half of the year.
What happened in H1
Rightmove delivered revenue of £211.7m for the six months to 30 June, up 10% on last year. This growth was primarily driven by sustained demand for Rightmove’s premium products among estate agents and developers, as well as strong contributions from growth verticals such as rental listings, mortgages, and commercial property. This is a diversification strategy that continues to pay dividends amid a subdued new-build housing market.
Meanwhile, operating profits rose by 10% while margins remained consistently strong around 70%. Looking ahead however, the company pointed to a softer H2 largely due to comparative record performance of H2 in 2024. Management maintained its full-year guidance of 8–10% revenue growth and the board approved a 9% increase in dividend payments.
CEO Johan Svanstrom also noted that investments in data analytics and artificial intelligence (AI) were enhancing the company’s proposition, while new-build developers were increasingly turning to Rightmove’s marketing tools to combat a post-pandemic low in new-to-resale home ratios.
Share price may be too hot
Rightmove hasn’t been on my radar much recently, but the stock has clearly performed well in recent months. However, it may have pushed too high.
Analysts’ consensus places the average price target slightly below the current share price, at about 722p. This implies the stock’s overvalued by around 9%. The most bearish of analysts believe the stock’s overvalued by as much as 35%. Meanwhile, the most bullish analysts sees fair value 18% higher.
Despite this, the consensus view is Hold and several brokerages continue to emphasise Rightmove’s entrenched market leadership, scalable platform, and diversified revenue streams as attractive attributes, especially in uncertain market conditions.
However, I tend to side with the more bearish analysts. The stock’s trading around 28 times forward earnings on a statutory basis. This falls to 24.9 times for 2026 and 22.1 times for 2027, but these figures still represent a considerable premium to the market.
A premium price-to-earnings (P/E) is fine if the stock makes up for it elsewhere. The balance sheet’s robust with a modest net cash position and the margins are very strong. However, the forecasted earnings growth rate is simply too weak to justify this P/E, in my opinion. In fact, the price-to-earnings-to-growth ratio’s nearly two — a reflection of a potential overvaluation.
Even factoring in the dividends, I think it’s a little overvalued. Based on today’s price, the dividend yield‘s projected to rise gradually from around 1.34% in 2025 to 1.69% by 2027.
Perhaps unsurprisingly, I’m not adding this one to my portfolio any time soon. I think investors should consider looking elsewhere until a better entry point appears.
