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Highlights:

  • REA Group’s Q3 revenue reaches A$374 million, operating EBITDA at A$199 million
  • Brokerage lowers FY25 revenue and EBITDA estimates by 2.4% and 1.9%
  • REA’s leadership position faces pressure from potential short-term competition risk

Jefferies has reduced its price target for REA Group (REA.AX) to A$246.1 from A$248.2 following the company’s latest quarterly performance. The Australian digital advertising company reported Q3 revenue of A$374 million, which translates to approximately $240.2 million USD. Operating EBITDA for the quarter stood at A$199 million. This result came in slightly below expectations, which may be contributing to the revised outlook.

Additionally, Jefferies has lowered its estimates for REA Group’s FY25 revenue and EBITDA by 2.4% and 1.9%, respectively. Despite the reduced financial outlook, Jefferies maintains a "buy" rating on REA Group’s stock, which has gained 5% in value so far this year. The firm noted that although REA's dominant market position is unlikely to be challenged in the near term, there is a potential for short-term challenges due to rising competition in the digital advertising space.

The median price target for REA Group, based on data compiled by LSEG, remains higher than Jefferies’ updated target at A$266.5. Despite the slight reduction in Jefferies’ price target, analysts seem to have a general consensus that the stock holds positive potential over the long term.

As of the latest trading session, REA Group continues to see positive market movement, with a 5% gain in stock value so far this year. Investors will likely keep an eye on the company’s performance in the upcoming quarters, particularly with regard to its ability to maintain its market-leading position amidst rising competition.