This report is an updated version of the report published on 2 January 2024 at 3:30 PM AEDT.
SEEK Limited (ASX: SEK)
SEEK Limited (ASX: SEK) is an Australia-based online employment marketplace company that operates across Asia Pacific and Latin America.
Recommendation Rationale – SELL at AUD 26.930
- Financial Performance: In FY23, SEK registered a 10% YoY increase in revenue and a 7% YoY jump in EBITDA.
- Outlook: The company expects to deliver on its FY24 guidance. Revenue is expected at AUD 1.18-1.26bn, EBITDA at AUD 520-560mn and adjusted NPAT at AUD 220-260mn for the year.
- Emerging Risks: SEK is exposed to risks arising from market competition, technological challenges, etc.
- Overvalued Multiples: On a forward 12-month basis, key valuation multiples (PE, EV/EBITDA, EV/Sales, and Price/Book) are higher than the median of the Interactive Media & Services industry.
SEK Daily Chart
Valuation Methodology: Price/Earnings Approach (FY June'24E) (Illustrative)
Given favourable FX movements, revenue, and earnings growth in FY23, and other factors, the company might trade at a slight premium to its peers. For valuation, few peers such as REA Group Ltd (ASX: REA), Car Group Ltd (ASX: CAR), Domain Holdings Australia Ltd (ASX: DHG), and others have been considered. Given its current trading levels, recent rally in the share price, and other factors associated, it is prudent to book profit at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 26.930, at 02:52 PM AEDT, as of 2 January 2024.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is neither an indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 3 January 2024. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Note 4: Dividend Yield may vary as per the stock price movement.