Rightmove share price ‘set to rise’ as agents pay more to list – forecast

Rightmove shares are set to rise to 600p because while estate agent numbers are dwindling, they are paying more to list.

The forecast comes from analysts at equity research firm Exane BNP Paribas.

It said that Rightmove’s results for the first half of this year, due on July 26, are likely to show strong ARPA (advertising rate per advertiser) progress, albeit offset by lower branch numbers.

Exane is predicting ‘healthy’ ARPA growth of 9%.

However, it adds that “weak agency membership trends and slowing online agent growth may weigh on sentiment”.

Exane also forecasts that 2020 will be “another year of tepid transaction momentum and Rightmove will likely pursue another price-led ARPA rise, with continued decline in agent membership”.

Exane has trimmed its previous revenue forecasts for Rightmove next year by 3%, predicting 7% growth instead of the previous 10% it had forecast.

It continues to forecast 8% revenue growth for this year, and 10% for 2021.

For this year, it is forecasting growth in ARPA to £1,092 per month per branch with a 2% drop in members; next year it is forecasting a figure of £1,180, with another 2% drop in membership; and in 2021, a figure of £1,276, with a 4% drop.

The analyst thinks that Rightmove’s profit margin will be 74% this year, 75% next and 76% in 2021.

Exane yesterday raised its share price target from 570p to 600p and reiterated its ‘outperform’ rating for Rightmove.

Exane said it remains convinced of the long-term structural growth potential of Rightmove.

Yesterday, Rightmove shares finished at 539p, giving it a market capitalisation of over £4.8bn.

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30 Comments

  1. Eyereaderturnedposter12

    If you’re still with RM in 2019/2020…I hope they took you out for dinner, walked you home, complemented you on your taste in interior design and kissed you… before pulling your trousers down…

     

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  2. Chatty Cathy

    Am I the only one on here that thinks it’s good value? compared to what my friends getting from OTM it’s still a no brainer

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    1. AJP123

      You dont pay the bill then.

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    2. Eyereaderturnedposter12

      Six years ago RM could have been described as “good value”…
       
      Assessing “value” usually requires a direct comparison, assuming your “friends” are on OTM, but you’re not…drawing a factually based comparison/conclusion may be difficult

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      1. r29woolf

        Surely assessing value you simply need to calculate the ROI?

        (cost per lead and/or cost per sale)

        i suspect if agents actually did this they might not feel so aggrieved.

        Newspapers were much more expensive and more difficult to measure success.

        I accept RMs attitude of zero fcuks given is unpalatable at times but in terms of value I agree with Cathy

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        1. Bless You

          because if there was no rightmove. We wouldn’t sell a house ever again…

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    3. office@antonyrichards.co.uk

      Cathy, I did a comparison of RM, Zoopla and OTM. RM had the least enquiries for the highest subscription. We’ve left. Haven’t noticed any difference except in the bank balance

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      1. r29woolf

        a sensible and rational decision if that’s the case. Although suspect most agencies don’t actually calculate this before moaning.  
        I have done the same and found Rightmove to cost significantly less per lead and even more so for actual sales.  
         

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        1. Eyereaderturnedposter12

          Of course, such decisions aren’t taken on an emotional arbritray basis…however “value” can be measured in innumerable ways.
          We ran our stats and as I stated in a previous comment to another article, several days ago we have seen 0% drop in business since leaving RM (albeit over the short-term…the long term remains to be seen- but I have the utmost confidence in my decision.
          Have a successful day!

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      2. Spare Room

        Its imperative to monitor your spend. For some time now RM have actually been our lowest lead generator.

        If you calculate the cost per enquiry, its up in the £35 mark, compare that with the others which fluctuate around £6 per lead its starting to look very expensive.

        Have we stepped away from RM – NO!

        Why – In all fairness for probably exactly the same reason most others haven’t…

        Will we – I suppose its a watch this space. Although i honestly cant remember ever feeling so bent over a barrel with any other supplier.

        So no doubt the train will continue rolling on and we will all just end up sucking it up.

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      3. MF

        office@antonyrichards.co.uk -Us too. Same outcome.

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      4. dave_d

        Not to **** on your parade, but just from looking at your website you claim to big the biggest agent in West Cornwall and you only have 4 properties currently To Let – it’s pretty much a no brainer that you don’t need to advertise on Rightmove… Try having 450 properties to let with 100 sales and a competitive market..

        But on the topic, we will be looking to reduce our spend this year.

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  3. GeorgeOrwell

     

    It would be very interesting to know how many agents have left Rightmove. That’s the story that Rightmove don’t want to publicise

     

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    1. Property Poke In The Eye

      I go first…. we left July 2017.

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      1. gardenflat

        Left end of Feb.

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    2. Jules

      We left February and have been doing better since !

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    3. Propertyboy

      We leave end of this month…

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  4. J1

    If you’re only with On The Market

    You’re NOT on the market!!!

    Nobody has heard of it and it’s the subscribing/founder agents fault.

    If they had all believed in it they would ALL have dropped RM immediately.

    RM is milking us all.  There was an opportunity for change and it was cocked up.  Simple.

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    1. SJEA

      There is still time for real change here !

      We left RM as we analysed the number of leads generated, then, from the enquiries, what leads turned into viewings.

      This is as far as I see the responsibility lies with the portals as it is our job to convert these leads.

      I am very dubious when you view many enquiries from the portals as they are geared to driving leads to you, but not necessarily of any quality.

      This article is not a surprise to any subscriber – RM are clearly driving the costs of advertising whilst at the same time delivering fewer enquiries to their agents.

      I received a call from RM just last week asking me to return to them and their offer was 3.5 times the cost of Z and OTM !!! I politely explained that I would not be returning until their costs were in line with other portals and assurances that their lead generation would be somewhat better than when I parted company with them.

       

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  5. Property Poke In The Eye

    The issue agents who advertise on RM have is when agents leave, RM  have to plug the loss.  The only way to do is by increasing fees.
     
    Challenging market will bring more closures over the coming 6-18 months.
     
    What I am also seeing where new agents open they are not on RM.  They still getting stock on.
     
    A good agent will focus with a small number of leads and convert to revenue.  

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  6. J1

    And another thing about RM

    Their customer service is non existent

    Does anyone else have another supplier who treats them with so much contempt?

     

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    1. fluter

      Yes, HMRC!

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  7. LTree

    We Left December 2018 and its been fine – the only thing stopping people is the fear of the unknown – because a whole generation of agents have had it installed in them that being on rightmove is the only way to sell house’s. I feel kind of of smug looking at other agents knowing what we are paying and we just had our end of year accounts done and we were double % figures up on last year. At the same time the apathy and indecision of agents to do something when you are clearly lambs to the slaughter in Rightmoves eyes does sadden me – although I think if you watch the figures over the next two years you will see the trickle become a torrent as more agents realise the only way of slaying the beast that is devouring their profits is to leave.

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  8. KC54

    We left in February.  No loss of business and not so much wasted time following up on leads that go nowhere – i.e. no phone answering, responses to calls or emails.  With the money saved, I am off on a very nice holiday, rather than funding those of RM shareholders

     

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  9. KByfield04

    None of us, I don’t think, would begrudge a company’s commercial success when it is ethical and reasonable. In a shrinking marketploace, RM has doubled both revenue & profit in the last 5 years through nothing but price hikes. This has felt particularly greedy in the last 2 years given tough trading conditions for many and this year’s letting fee ban- the full impact of which is still to be seen/felt by many. However, to advise that all agents should come off is madness. The portals succeed in different market areas (both geographically and in terms of sales/rentals/commercial) so it is key that agents understand what the portal delivers for them- not just lead volume (as high or low this tells you nothing about the quality) but the transactional value they deliver. How many lets/sales did you achieve from the leads they generated and, if you are lucky enough to get client leads from them (can’t remember the last time we did) what percentage instructed you and what percentage of those did you sell/let. Only by understanding this from all of your leads can you understand where to focus your attention and spend. Our analysis found that, whilst RM & Zoopla generate us a similar volume of leads, the revenue produced is dramatically different. In fact Zoopla generated almost exactly double the amount of revenue for us compared to RM and, vitally, did so for around 1/3 less a month in fees. Whilst doing anything ‘out of principle’ in business can be a dangerous step, I am furious at RM’s aggressive price hikes and arrogant attitude: pay, downgrade or leave we don’t care. I feel there is no justification to their ongoing hikes and I also sympathise with fellow agents across the UK who are facing much tougher times than us- compounded by a greedy, selfish supplier. The big thing for me is that RM now costs us the same each month as our beautiful Shoreditch office or some of my staff- and doesn’t come remotely close to delivering the value to my business that they do. As such, we intend to leave RM by year-end and are currently investigating exactly where we will invest the £2k a month we will no longer spend on them to ensure our company continues to thrive, our clients and consumers get the very best and we continue to evolve as an agency. Looking around it is quite staggering to see the array of services we could have for this money and I am adamant our company will do better as a result.

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  10. Jules

    As the saying goes you have nothing to fear but fear itself – This is the first time I’ve posted on here but really feel very strongly about this, agents really need to wake up to this ” THERE IS LIFE AFTER RIGHTMOVE ” We came off in February after they increased our fees to over £ 2000 a month, after further research I discovered that we only had 2 direct property leads from them the month before, the rest of the leads were vendors & surveyors, Rightmove had become a very expensive Yellowpages ! I did lose a couple of vendors early on who believe that Rightmove is the Internet and of course our competitors use it as a stick to beat us with but do you know what we are thriving I have spent the money saved on training and coaching for the business, we are providing a better service now to our vendors and we are listing & selling more. Yes it was scary leaving but I have absolutely no regrets except wishing I had done it sooner, to all those knocking OTM it works for us and I am happy to promote them knowing we are paying them a fraction of what we paid to RM and for better quality leads also the level of enquiry to our own website has risen sharply – people will find us and our properties have confidence in yourself !

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  11. HIT MAN

    OTM certainly works better than RM in the Northeast. The Northeast are leading the way!
     
    LEADS or ENQUIRIES??? PLEASE DEFINE? I don’t and will never pay for leads, I find it hard to understand why anyone would pay Extra to RM for leads, I pay to advertise property on RM and OTM its only because most Sales agents in my town are with RM and would use it against me on instruction if I came off.
     
    The ENQUIRIES I get from OTM outweigh the amount from RM, especially tenant and landlord enquiries. Im relatively new in sales only been doing it for 10 months, if I was only doing Lettings then its a no brainer YOU DON’T NEED RM FOR LETTINGS.
     
    Below is this month’s summary of from both. Better breakdown from OTM. if everyone looked at this they would soon realise the same.
    Leads from 11/06/19 to 10/07/19
     
    OTM TOTAL LEADS  101  EMAIL LETTINGS 99  EMAIL SALES  1 EMAIL APPRAISALS 1 TELEPHONE LEADS 26   
    RM TOTAL LEADS     62     TELEPHONE LEADS    43   EMAIL LEADS   19

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  12. htsnom79

    I just get annoyed answering the phone twice, half way through ” good morning htsnom estate agents” and then stopping while the smug stupid bint from rightmove finishes her script before starting again..

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  13. Budgie boy

    It’s a regional thing I believe, but we have always had much more success with Zoopla than Rightmove. OTM have shafted V1 members and have a lot of “repair work” to do with them, if they’re ever going to succeed. Just my opinion, based on my experiences.

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  14. Sam West

    At the moment we’re with Residential People (Free to list) which gave us 16 leads this month, On The Market 33 leads and RightMove 43.

    The one thing I’ve realised about OTM leads and comments confirm this… Is the leads are low quality, so you’re employing workers to entertain dead leads. Rightmove despite the price increases is most profitable for our business and Residental People is just a bonus of free leads – hope they remain free as they’ve promised us “Free for life”.

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