Shares of U.K. property realtor Rightmove PLC (GB:RMV) dropped 4.1% on December 13 following a warning from American rival CoStar Group (NASDAQ:CSGP) (DE:RLG). The latter gave a wake-up call to Britain’s most popular online property search engine on finishing the £99 million acquisition of the British online property portal, OnTheMarket, on December 12.
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Rightmove runs an online portal that attracts agents, buyers, renters, and new home developers. The FTSE 100 listed company provides users with tools such as the house price index, which tracks house prices and analyzes price trends in the U.K. house market, and a mortgage calculator. Recently, Rightmove raised its average revenues per advertiser target for the full year despite the housing market uncertainty and established its leadership spot in Britain’s housing market. Year-to-date, RMV shares have gained 10%.
CoStar Plans to Disrupt the U.K. Property Market
CoStar CEO Andy Florance nudged Rightmove, saying, “The current market leader has grown complacent focusing on margin over innovation, and pricing ahead of value.” CoStar is a leading provider of information, analytics, and marketing services to the commercial real estate industry in the U.S. CSGP stock gained 1.4% on Wednesday.
With the OnTheMarket acquisition, CoStar is seeking to expand its footprint in the U.K. and gain a leadership position by leveraging the expertise of both companies. Further, the company plans to spend £46.5 million toward sales and marketing in the first full year post-integration. The estimated spend is three times more than Rightmove’s annual media spend. CoStar hopes to make OnTheMarket the most visited and trusted real estate site in Britain by spending millions of pounds on upscaling and advertising on the portal.
Is Rightmove Share a Buy, Sell, or Hold?
On TipRanks, RMV stock has a Hold consensus rating based on four Buys, four Holds, and two Sell ratings. The Rightmove share price target of 592.11p implies 4.6% upside potential from current levels.
