One of my favourite FTSE 100 stocks is Rightmove (LSE: RMV). Over the long run, this company’s been a fantastic investment.
This morning (9 May), the Footsie company posted a trading statement with some guidance for 2025. And it didn’t disappoint, predicting strong revenue growth for the current year.
Decent top-line growth predicted
A lot of FTSE 100 companies are facing uncertainty at the moment. Combine tariff issues with a potential recession/consumer slowdown and the outlook for a lot of businesses looks murky.
Not Rightmove however. For the year, it’s expecting revenue growth of 8%-10%, which is a decent level given the company’s maturity. The company’s also expecting an underlying operating profit margin of 70%. There are only a few companies in the FTSE 100 that can generate that exceptional level of profitability.
“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. We look forward with confidence and are today reiterating our expectation of delivering 8-10% revenue growth this year.”
Johan Svanstrom, CEO of Rightmove
Other highlights
There were a few other snippets in the trading statement that I think are worth highlighting. One is that the company’s had a lot of success with its recent advertising campaign ‘if they can find it, so can you’. This ad (where the woman dives into the sea outside her house) has led to strong social media engagement (three times higher year on year).
Another is that consumers can now request an ‘Instant Online Valuation’ from a property’s sold-price history. In the first four months of the year, this was used over 2m times.
A third takeaway is that the digital company’s now incorporating artificial intelligence (AI) into its platform. Recently, it has been trialling ‘AI Keywords’ as the first step towards a more personalised and conversational user search.
“We’re making strong strides forwards in delivering new tools and products to make the property journey smoother for both consumers and our partners,” Svanstrom also said.
Overall, it was a very encouraging update, in my view. While a lot of Footsie businesses are struggling a little right now, this company appears to be firing on all cylinders.
Worth a look today?
Are Rightmove shares worth considering today? I think so. This is a high-quality technology company with a strong brand, a huge market share (80%+), and an insanely high level of profitability and it’s not that expensive. Currently, the price-to-earnings (P/E) ratio using next year’s earnings forecast is only 23.
Given that the company is immune to tariffs, and also relatively resistant to any downturn in the UK property market, I think that’s a very reasonable valuation. To my mind, this is a classic ‘growth at a reasonable price’ (GARP) stock.
It’s worth pointing out that competition from rivals is a risk. Today, there are a few others in the UK property search space that are aggressively trying to capture market share.
But I’m encouraged by the moves (mentioned above) Rightmove’s making to strengthen its platform. I’m optimistic this Footsie winner can continue winning.
