Domain Holdings Australia Ltd Ordinary Shares
DHG: XASX (AUS)
| Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
|---|---|---|---|
| A$2.90 | Znvbkkx | Bfjl |
Domain's Network Effects and Moat Weakening Due to Excessive Price Hikes
Business Strategy and Outlook
We expect Domain’s near-term challenges to center on navigating significant volatility in the Australian housing market. After the onset of the COVID-19 pandemic, Domain received a substantial boost to revenue and profit margins from the booming housing market. We estimate that residential transactions were around a third above trend levels during fiscal 2021 and 2022 and we expect that Domain, as the second-largest real estate listings platform, benefited disproportionately from this event. With the normalization of interest rates, we have seen Domain's residential listings reduce materially, declining 14% in fiscal 2023.