ii view: Rightmove’s AI bet crashes the share price
A dominant market position and with the company having been subject to a takeover approach in 2024. We assess prospects.
7th November 2025 11:26
by Keith Bowman from interactive investor
Trading update for the year to 6 November
- Continues to expect annual revenue growth of around 9% in 2025
- Now expects full-year revenue growth of between 8-10% in 2026
- Now expects full-year adjusted operating profit growth of 3-5% in 2026
Chief executive Johan Svanstrom said:
“AI is now becoming absolutely central to how we run our business and plan for the future. We are already working on a wide range of exciting AI-enabled innovations for the benefit of our partners and consumers, and see vast potential utilising our leading reach and connected data.
“We are investing to accelerate our capabilities, which we are confident will create an even stronger platform and higher-growth business over time. We aim to further advance our leading digital position in the UK property ecosystem.”
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ii round-up:
Property advertising company Rightmove (LSE:RMV) today predicted growth in 2026 profit that was below City forecasts, caused by planned investment in AI initiatives.
Revenue for both 2025 and 2026 is still predicted by management to grow by around 9% but with investments of around £18 million in AI expected to slow growth in 2026 adjusted operating profit to between 3% and 5%. City analysts had forecasts growth closer to 10%.
Rightmove shares slumped as much as 20% in UK trade, later recovering to a fall of 11%. Shares in the FTSE 100 company came into this latest news up around 10% over the last year. Car selling website operator Auto Trader Group (LSE:AUTO) is down around 3% over that time, while the FTSE 100 index is up 19% over the last year.
Property professionals such as estate agents, lettings agents and new home builders, pay Rightmove a subscription fee to advertise their properties on its website.
Rightmove's AI initiatives now include transforming its app and AI-powered search capabilities as well as upgrading the back-end infrastructure.
The group flagged a multi-year collaboration with Google Cloud (Alphabet Inc Class A (NASDAQ:GOOGL)) spanning cloud infrastructure, platform, data and AI capabilities.
Year-to-date, Rightmove has added eight new product teams to help drive growth, supported by AI copilots.
Given AI investments, Rightmove management now holds ambition for revenue growth of 10% or over from 2030 and onwards, with growth in adjusted operating profit of 12% or more.
Broker UBS reiterated its ‘buy’ stance on the shares post the results. Results for the year to 31 December are likely to be announced late February or early March.
ii view:
Rightmove highlights itself as the fourth-busiest UK-based digital platform during 2024, behind only the BBC, digital publisher and owner of the Daily Mirror, Reach (LSE:RCH), and the UK government's own website. Agency related sales generated its biggest slug of revenue in 2024 at 72%. New home developer demand made up a further 18%, with other businesses such as commercial property, data services, overseas listings, and third-party advertising accounting for the balance of 10%.
For investors, required investment costs in AI are now expected to hold back profit growth. An ongoing global trade war raising prices and potentially keeping interest rates elevated should not be forgotten, while a forecast dividend yield of under 2% compares to over 5% for property owners and REITs Land Securities Group (LSE:LAND) and British Land Co (LSE:BLND).
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On the upside, a takeover approach by Australia's REA Group during 2024 is not to be forgotten. Investment in AI is being made for the benefit of the medium to longer term. A diversity of customer types is present from buyers and renters under agency customers to new home sales from developers, while targeted areas of growth away from its core include mortgages, rental services and digitalising the rental process.
In all, Rightmove’s dominant market position will keep the shares of high interest, especially to bargain hunters. That said, more cautious investors may await evidence that AI investment is improving the business.
Positives:
- Strong market position
- Diversity of customers
Negatives:
- Uncertain economic outlook
- Costs generally remain elevated
The average rating of stock market analysts:
Hold
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