Alongside greater innovation, the company is continuing to expand into other areas that offer long-term growth potential.
For example, it is ramping up investment in its commercial property market offering and increasing its range of rental services as it seeks to diversify in order to reduce its reliance on transaction volumes in the residential property market.
It will do so under a refreshed management team, with a new chief executive having been appointed last year. As with any company, management changes undoubtedly represent an additional risk for investors. However, the firm’s updated strategy appears to be sound.
And with a solid balance sheet that includes a net cash position in excess of £31m, it remains a high-quality business that is relatively low risk.
Trading on a forward price-to-earnings ratio of around 21, Rightmove’s shares remain relatively expensive at a time when the UK stock market is exceptionally cheap.
But with the company having an enviable competitive position and very solid finances, alongside a sound growth strategy, it continues to merit a substantial premium compared with the wider equity market.
When combined with an increasingly upbeat outlook as inflation falls, interest rates are cut and the economy’s performance drastically improves, the stock offers significant capital growth potential.
Therefore, while it has so far proved to be a disappointing recommendation, Questor remains highly optimistic in its capacity to deliver high returns over the long run. Keep buying.
Questor says: buy
Ticker: RMV
Share price at close: 532.4p
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