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    Is AI-Driven Home Search Threatening REA Group’s Platform Advantage And Altering The Investment Case For REA Group (ASX:REA)?

    Simply Wall St·12/16/2025 20:27:49
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    • Recently, commentators have raised concerns that artificial intelligence could erode the long-held dominance of online property platforms such as REA Group by reshaping how buyers and sellers search for homes.
    • This debate matters because REA’s success has largely rested on being the default digital gateway for property listings, a role AI-driven search tools could increasingly challenge.
    • We’ll now examine how rising concern that AI may weaken REA’s platform advantage could influence the company’s longer-term investment narrative.

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    REA Group Investment Narrative Recap

    To own REA Group, you generally need to believe its realestate.com.au platform can stay central to how Australians buy and sell property, even as AI reshapes search. The recent discussion about AI threats does not appear to change the near term focus on listing volumes as the key catalyst, nor does it displace competition from Domain and CoStar as the most immediate business risk.

    Among recent announcements, REA’s FY2025 result, with net income of A$677.9 million and a fully franked A$1.38 final dividend, stands out as most relevant. It underlines how much value is still being generated from the existing platform model at a time when investors are questioning whether AI-driven search tools could gradually weaken REA’s long term pricing power and margin profile.

    Yet while many investors focus on AI, one underappreciated risk you should be aware of is that...

    Read the full narrative on REA Group (it's free!)

    REA Group's narrative projects A$2.3 billion revenue and A$905.3 million earnings by 2028. This requires 7.1% yearly revenue growth and an earnings increase of about A$227 million from A$677.9 million today.

    Uncover how REA Group's forecasts yield a A$243.58 fair value, a 31% upside to its current price.

    Exploring Other Perspectives

    ASX:REA 1-Year Stock Price Chart
    ASX:REA 1-Year Stock Price Chart

    Six members of the Simply Wall St Community value REA Group between A$156 and A$244 per share, reflecting a wide span of expectations. As you weigh those viewpoints, remember that rising AI driven competition could directly affect REA’s pricing power and long term earnings profile.

    Explore 6 other fair value estimates on REA Group - why the stock might be worth 16% less than the current price!

    Build Your Own REA Group Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.