Domain Holdings Australia Ltd Ordinary Shares DHG

Morningstar Rating
A$3.15 0.00 (0.00%)
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Company Report

A Financial Recovery, but a Competitive Degradation

We expect Domain’s near-term challenges to center on navigating significant volatility in the Australian housing market. After the onset of the covid-19 pandemic, Domain received a substantial boost to revenue and profit margins from the booming housing market. We estimate that residential transactions were around a third above trend levels during fiscal 2021 and 2022 and we expect that Domain, as the second-largest real estate listings platform, benefited disproportionately from this event.

Price vs Fair Value

DHG is trading within a range we consider fairly valued.
Price
A$3.15
Fair Value
A$1.80
Uncertainty
High
1-Star Price
A$4.14
5-Star Price
A$7.73
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Domain and REA Group effectively operate a duopoly in residential real estate listings in Australia.

Bears

Domain is significantly overshadowed by REA Group, which has the size and resources to drive down Domain’s market share and profit margins, should it so choose.

Trading Information

Previous Close Price
A$3.15
Day Range
A$3.143.20
52-Week Range
A$2.714.03
Bid/Ask
A$3.03 / A$3.16
Market Cap
A$1.99 Bil
Volume/Avg
1.5 Mil / 1.2 Mil

Key Statistics

Price/Earnings (Normalized)
38.35
Price/Sales
5.08
Dividend Yield (Trailing)
1.90%
Dividend Yield (Forward)
1.90%
Total Yield
2.01%

Company Profile

Domain is a technology company operating in the Australian real estate sector. Domain’s primary business is a digital listings platform for residential real estate, www.domain.com.au, which is the second-largest residential real estate listings platform in Australia, after www.realestate.com.au, which is owned by REA Group. Domain is majority-owned by media company Nine Entertainment, while REA is majority-owned by rival media company News Corp. Domain’s other businesses include a digital listings platform for commercial real estate, solutions for developers and agents, and print advertising.
Sector
Communication Services
Industry
Internet Content & Information
Stock Style Box
Small Core
Total Number of Employees
1,125

Competitors

Valuation

Metric
DHG
REA
SEK
Price/Earnings (Normalized)
38.350.8728.44
Price/Book Value
1.8117.183.43
Price/Sales
5.0815.558.17
Price/Cash Flow
16.9344.8526.95
Price/Earnings
DHG
REA
SEK

Financial Strength

Metric
DHG
REA
SEK
Quick Ratio
1.061.150.68
Current Ratio
1.161.530.86
Interest Coverage
5.7520.000.44
Quick Ratio
DHG
REA
SEK

Profitability

Metric
DHG
REA
SEK
Return on Assets (Normalized)
3.33%17.36%3.54%
Return on Equity (Normalized)
4.51%30.84%6.77%
Return on Invested Capital (Normalized)
4.42%24.42%5.57%
Return on Assets
DHG
REA
SEK

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