The leading UK property portal, Rightmove is the website you visit if you’re looking to buy a house in the UK. For every 100 houses bought or sold, 84 are found on Rightmove.
Rightmove is paid by the estate agents, that need to pay a monthly subscription to list their properties on the website. This creates a self-reinforcing network effect, because if you’re selling a house you’ll want your house to be listed on Rightmove, or you’ll give the instruction to another agent. As a result, all agents need to be on Rightmove over the alternatives (Zoopla, OnTheMarket), and Rightmove enjoys enormous pricing power.
Zero debt and a management that has historically returned all available cash to the shareholders in the form of buybacks, Rightmove requires very little capital to run, with operating margins consistently in the 65-69% range.
Ironically this success is also the reason why the stock is down 46% from the August 2025 peak: the market is pricing in three fears, and I believe all three of them are unfounded.
The first, biggest threat is the £1.5B class action, funded by Innsworth Capital. Rightmove is being sued for anti-competitive behaviour, as the estate agents claims it charges too much. The same estate agents would undoubtedly understand that a house in central London is worth more than a house in the North East of England, and Rightmove rents out the eyeballs of hundreds of thousands of interested buyers, surely an exclusive type of digital real estate.
The second threat comes from OnTheMarket, and their owners CoStar. CoStar is as dominant in the commercial real estate space as Rightmove is in residential, but they’ve aggressively tried to expand in the residential real estate market, both in the UK and the US, to compete with Zillow and Rightmove. So far they haven’t been successful, as their strategy can essentially be summed up with “buy more TV ads”, and this will drive up vanity metrics but won’t impact Rightmove’s moat. The strategy doesn’t appear to be too popular among CoStar shareholders, as the stock is down 69% from their peak, nevertheless CEO Andy Florance seems convinced this is the right thing to do. This is the same guy who put $100,000 into hundreds of balloons and watched his employees fight each other for the cash, so you’ll forgive me if I’m somehow hesitant to believe he’s acting as a rational economic actor in this situation.
The third reason the stock is down is the same reason any other software stock is down: AI fears. I think Rightmove can only benefit from AI, as they’ve disclosed only 1 person every 200 lands on Rightmove via an AI chatbot. They’ve announced an increase in their AI CapEx spend that I think benefits them long-term as they can use these tools to provide more value for their customers, convert viewers into homebuyers at better rates, and overall increase the value they can offer to their customers.
As for the valuation, I see 220.67 millions in owner earnings for FY2025, roughly 14.5x trailing earnings for a business growing revenue 8% YoY, with >60% margins, that’s buying shares back.
I think the business should be warranted a higher multiple, but the market will likely remain depressed while there’s uncertainty around the lawsuit, which isn’t a problem as they’re buying their shares back at a valuation that’s below their intrinsic value.
Once the uncertainty around the lawsuit settles (and you will need to be a little patient here, as it might take a few years) the market will re-rate the stock. Innsworth Capital isn’t a charity focused on the well-being of UK real estate agents, it’s a hedge fund that makes money by suing companies, so despite the £1.5B headline number designed to scare the market I suspect there’s more than a little room for negotiation here.