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One reason why the Domain (ASX:DHG) share price is down 7%

Could spillover from the REA Group’s full-year results be to blame for the falling share price?
The post One reason why the Domain (ASX:DHG) share price is down 7% appeared first on The Motley Fool Australia. –

The Domain Holdings Australia Ltd (ASX: DHG) share price is having a rough day on the market.

At the time of writing, shares in the online real estate listings company are swapping hands for $4.55 – down 6.48%.

While the company hasn’t made any price-sensitive announcements in over 2 months, one possible explanation may be spillover from REA Group Limited (ASX: REA)’s full-year results. REA Group is down 5.62% presently to $157.88 per share.

Let’s take a closer look.

The Domain share price is falling

As Motley Fool reported, the REA Group share price is deep in the red despite impressive financial results. REA’s revenue was up 13% to $928 million and net profit jumped 18% to $318 million. Earnings before interest, taxes, depreciation, amortisation (EBITDA) increased 19% to $565 million and the company will pay a dividend of $1.31 per share – up 19% year-on-year.

However, in its report, REA management also revealed that istings for July fell 3% year-on-year. They attributed this to a sharp decline in the Sydney market due to the city’s COVID induced lockdown.

This is an industry wide factor and since Domain and REA Group are competitors, this could explain the steep fall in the Domain share price, as well as REA’s.

The harbour city has been in lockdown for 6 weeks as of writing. During that time, the Domain share price has fallen 10.5% and the REA share price has slumped 4.65%.

Domain share price snapshot

Despite today’s losses, over the past 12 months, the Domain share price has increased 33.9%. The S&P/ASX 200 Index (ASX: XJO), meanwhile, is up 24.4% over the same time period. In other words, Domain has outperformed the ASX 200 by 9.5 percentage points.

Year-to-date is a different story. The ASX 200 is 12.4% higher since the beginning of the year while Domain Holdings is 0.2% lower.

The 52-week high for Domain is $5.61 and its 52-week low is $3.42.

Domain is majority owned by Nine Entertainment Co Holdings Ltd‘s (ASX: NEC) subsidiary Fairfax. It has a market capitalisation of around $2.83 billion.

The post One reason why the Domain (ASX:DHG) share price is down 7% appeared first on The Motley Fool Australia.

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More reading

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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 recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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