Despite well-documented housing market challenges this year, PropTech companies - including the likes of Rightmove(RMV) , OnTheMarket (OTMP) , and Zoopla - are managing to buck the trend.
Rightmove released its half-year results today, noting revenue rising 10% to £179.5m, as customers increased their use of its digital products and continued to upgrade their Estate Agency packages. This was the the highest revenue growth in a first half period since 2018.
Though Rightmove is reaping rewards from its subscription packages, the price hasn’t been immune to controversy in recent times.
In June, Rightmove announced they would increase subscription fees by 17% - taking the basic package to £1,385 per month - which was not well met by agents, saying that the fee hike was unjust given the pressures in a much-reduced housing market.
Contrasting this, PropTech company OnTheMarket charges, on average, £210 for agents to advertise on its website, making this more appetising for estate agents amid a tough market backdrop.
In its full-year results for the year ended 31 January 2023, OnTheMarket reported revenue increasing to £34.4m, and end cash stood at £11.3m with no debt.
With its most recent result in mind, OnTheMarket is significantly undervalued, with the broker Zeus forecasting £42m in sales for 2025, alongside £13.3m EBITDA, and £21m in cash. OTMP is trading at 2.5x EBITDA, in a business that trades at 12.5x EBITDA.
Aside from these figures, OTMP also provides a number of additional services, which position it as more than just a property portal, with continued sign-ups to its software solutions further underscoring the added value it offers to housebuilders, letting agents, and the industry at large.
For example, last month OTMP unveiled Your Property Services, a sales and lettings data nurturing service aimed at empowering estate agents to boost their earnings and secure more instructions by leveraging valuations. The value added through its software solutions gives OTMP a strong edge over its market competitors.
Tying this together, we see OTMP as an attractive opportunity for investors.
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