REA Group's pricing power stems from its network-effect-based narrow economic moat.
We maintain our fair value estimate for narrow-moat-rated REA Group at AUD 47.00 per share following its first-half result, which met our expectations. At the current market price of AUD 53.47, we still believe the shares are overvalued, despite our forecast EPS CAGR of 11.8% over the next decade. The market price implies a fiscal 2017 price/earnings ratio of 31, whereas our DCF-based fair value estimate implies a P/E of 27. Over the past decade, REA Group has traded on a P/E ratio of between 11...REA Group is a multinational digital advertising company, based in Australia, that specializes in property. Co. provides a range of premium property listings as well as products for markets adjacent to property such as utility connections, and advertising solutions for property developers and display media advertisers. Co. operates residential, commercial and share property websites, realestate.com.au, realcommercial.com.au and flatmates.com.au, Chinese property site myfun.com, and iProperty Group which owns a number of property portals in Asia. Co. also maintains significant shareholdings in Move, Inc. in the United States and PropTiger in India.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
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