REA shares rise as investors look past a rough year

REA Group Ltd (ASX: REA) shares are pushing higher on Friday after the property listings giant released its third-quarter update.

At the time of writing, the REA share price is up 2.37% to $178.61.

The gain comes despite a weaker session for the broader market, with the S&P/ASX 200 Index (ASX: XJO) down 1.2% to 8,767 points. This follows reports of Iranian attacks on 3 US destroyers in the Strait of Hormuz overnight.

REA shares have now gained around 12% over the past month, although the stock is still down about 28% over the past year.

Let’s take a closer look at the release.

The numbers behind today’s move

In a statement to the ASX, REA reported revenue from core operations of $398 million for the 3 months ended 31 March, up 11% on the prior corresponding period. After adjusting for mergers and acquisitions, revenue was up 6%.

The earnings line also looked solid. EBITDA excluding associates rose 11% to $220 million, while operating expenses increased 5% to $178 million.

That is probably helping the share price today. The stock has been sold down hard over the past year, but the business is still growing revenue and earnings.

Across the first 9 months of FY26, REA reported revenue of $1.31 billion, up 5%. EBITDA excluding associates increased 7% to $789 million.

Australian property listings are doing the work

The Australian business did most of the heavy lifting during the quarter.

Australian revenue rose 12% in the quarter, helped by stronger yield growth and a small lift in national buy listings. Residential revenue also increased 12%, supported by higher prices, add-on products, subscriptions, and a better mix of listings.

National buy listings were up 1% for the quarter. Sydney rose 4%, while Melbourne was up 7%.

REA also pointed to record audiences across realestate.com.au. The platform reached an average of 12.9 million people a month during the quarter, including 6.3 million people who used it exclusively.

Costs and April listings help sentiment

Another reason investors may be feeling better is the cost outlook.

REA lowered its FY26 cost growth guidance, with group operating costs now expected to rise in the low to mid-single digits. Australian operating costs are expected to grow in the mid to high single digits.

The company still expects national residential buy listings to fall by 1% to 3% across FY26. But April was much stronger, with listings up 20% in Melbourne and 25% in Sydney.

Foolish Takeaway

After reporting a decent quarterly update, I can see why REA shares are finding buyers today.

The share price has had a rough year, but the company is still putting up growth in revenue, earnings, and audience numbers. The lower cost guidance also helps quite a bit.

I wouldn’t call the stock cheap after today’s bounce. But if listings keep improving, I’d be taking another look.

The post REA shares rise as investors look past a rough year appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.