Why is REA stock surging today?
REA Group's stock price skyrocketed by 11.1% on Thursday following the announcement of its first-quarter FY2027 trading update. The Australian online property advertising company reported a revenue of A$450 million, an 11% increase year-over-year, and an operating EBITDA of A$294 million, a 12% rise. These figures surpassed market forecasts, significantly exceeding those of major brokers like Citi and UBS.
The company's core residential business was the main contributor to the positive results, with controllable buy yield growth of 14% outpacing a 2% decline in national buy listings, particularly in Sydney and Melbourne markets, which saw a sharper 16% drop. REA's website, realestate.com.au, garnered an average of 11.5 million monthly visitors, with 5.6 million not visiting its closest competitor, highlighting its strong market dominance.
The company also reaffirmed its FY27 outlook, predicting low single-digit declines in new national buy listings, which allayed investor concerns about a more cautious outlook. The positive market environment further aided REA's surge, with the S&P/ASX 200 rising nearly 2%, buoyed by a strong performance from Wall Street following the Democrats' successful control of both U.S. congressional chambers, which increased global risk appetite.
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