High profile stock market commentary website Motley Fool has given Zoopla a strong endorsement on the eve of the first anniversary of OnTheMarket.
Analyst Peter Stephens, writing on the Motley Fool website, says that with the stock market volatile, it’s a good idea for investors to seek out companies “with wide margins of safety”. He lists five, one of them being Zoopla Property Group.
“[Zoopla] was able to grow its bottom line by an impressive 29 per cent in the last financial year, with demand for housing remaining strong as a result of an improving UK economy. This trend looks set to continue, since Zoopla is expected to increase its net profit by another 29 per cent in the current financial year and despite this, it trades on a relatively low valuation” says Stephens.
He continues: ”Zoopla has a price-to-earnings growth ratio of only 0.7 and this indicates that its shares could continue their 30 per cent rise of the last year.”
Stephens says there is the potential for an interest rate rise in 2016. “But with rates likely to stay low over the coming years the UK property market is set to remain buoyant and this provides Zoopla with further opportunities for growth” he concludes.
A year ago the future of Zoopla was uncertain with the launch of OnTheMarket, but last week ZPG announced the return of several agencies from the challenger portal. The Financial Times this morning reports that Zoopla has been the subject of takeover speculation in recent days.
Meanwhile OTM itself has issued a statement to mark the anniversary, saying it is now recognised as a “challenger brand.”
“We have already revealed this year that we have achieved the support of 6,500 estate and letting agent offices – a 50 per cent increase on this time last year – and we are now on our way to our next milestone of achieving support from 7,500 offices.
“There are many areas of the UK where we are already the number 2 portal in terms of available residential listings – and have been for a long time – and many others where just a few extra offices would push us over the line” says the statement.