Rightmove’s investment in artificial intelligence appears to be paying off, with analysts pointing to higher consumer engagement and stronger lead generation following the portal’s latest half-year results.
Shares in the company rose almost 2% by the close of trading on Friday after investors welcomed results that broadly met market expectations, despite a softer housing market and a reduction in full-year revenue guidance linked to continued weakness in the new homes sector.
The portal reported first-half revenue in line with forecasts, while underlying operating profit came in slightly ahead of expectations. Analysts said the resilience of the core estate agency business, underpinned by strong customer retention and continued product investment, helped offset the slowdown in new-build activity.
Much of the attention centred on “Ask Rightmove”, the portal’s AI-powered conversational search tool, which the company says is increasing consumer engagement and improving lead conversion. Rightmove also reported that consumers are spending more time on its platform, reinforcing its position in the online property market.
Anthony Codling, of RBC Capital Markets, said: “Rightmove has, as ever, demonstrated impressive resilience in the face of an uncertain housing market, with H1 results in line with market expectations on revenue and a touch ahead on underlying operating profit. The revenue guidance reduction is entirely a function of the well-flagged New Homes weakness, not a demand problem in the core Agency business, and profit guidance remains.
“We continue to believe that Rightmove is an AI winner not a loser, with concrete evidence emerging that “Ask Rightmove” is driving higher engagement and lead conversion, and the shares remain materially undervalued at current levels.”
The rollout of further AI-powered products is expected to continue during the second half of the year, with new tools aimed at improving lead quality and supporting estate agency workflows.
While investors responded positively to the results, many estate agents are likely to observe that Rightmove’s resilient financial performance continues to be supported by portal subscription fees at a time when agencies themselves are operating in a more challenging sales market.
“Rightmove does not control the ebbs and flows of the underlying housing market, but it is building products that have increased its share of time spent on portals and that lays down the foundations for future profit growth”, Codling added.
