Rightmove shares hit five-year low amid anger over fee hikes
The portal's share price reached a high last year before nosediving after it revealed it planned to spend £60 million on AI development.
Rightmove’s share price has fallen further this week to a new five-year low after a 15% drop in the last month.
The latest valuation of the portal’s share put it at £4.37 compared to £6.35 in 2021, a fall of around 30%.
There were similar low points in 2022 and 2023, and the price recovered, reaching a high point of over £8 in August last year.
Plummeted
But it plummeted in November following its latest trading update which revealed it is planning to spend £60 million over three years on AI and product development that would impact profits.
It forecasted 8–10% revenue growth and 3–5% profit growth this year as it moves through what it calls an “investment phase”. The additional spending, it said, would support “double-digit profit growth” in later years.
And the portal is due to publish its full-year results later this month.
Agent warnings
Last week, independent agents warned they will go out of business if Rightmove ploughs ahead with proposed fee increases of up to 18% this year.
And it is already facing a group legal action seeking to recoup “excessive and unfair fees”.
The question people might now ask is whether Rightmove’s AI spending plans are an offensive or defensive move.”
Dan Coatsworth, Head of Markets at AJ Bell, says: “It’s no coincidence that Rightmove’s shares have been in steady decline since announcing last November it would make AI-related investments.
“A year earlier, any mention of AI would have been cause for celebration. Now it’s a suggestion that Rightmove is having to move with the times, and investors are jittery about companies spending on tech,” he says.
“The question people might now ask is whether Rightmove’s AI spending plans are an offensive or defensive move.”
Rightmove feels like a necessary evil for independent agents like myself. The disparity in pricing is stark – corporate chains with multiple branches receive huge discounts, whilst small business owners pay premium rates with no equivalent support. This imbalance has persisted for far too long, and I welcome anything that might challenge their market dominance.
AI will make the whole Rightmove concept completely redundant and they know it hence cashing as much money as they can with no regard whatsoever for Agencies, they know they will be long gone, possibly by the end of the decade. They will be studied like Blockbusters Video Store.
It is important now for Agents to invest in their own Websites, that is where the AI traffic will lead clients in the future.