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Should you buy SEEK Limited (ASX:SEK) shares after today’s AGM update?

In morning trade the SEEK Limited (ASX: SEK) share price has had a positive start to the day and has pushed higher.

At the time of writing the job listings company’s shares are up 1.5% to $18.51 ahead of its annual general meeting in Melbourne this afternoon.

Why are SEEK’s shares pushing higher?

Investors appears to have responded positively to the release of its annual general meeting presentation to the market this morning.

As well as providing shareholders with a reminder of how the company performed in FY 2018, management also provided an update on its expectations for FY 2019.

In FY 2018 SEEK delivered a 25% increase in revenue to $1,294.5 million, a 15% lift in EBITDA to $432.8 million, and a 1% decline in reported net profit after tax (excluding significant items) of $200.2 million.

This year management has reaffirmed its annual revenue growth guidance of between 16% and 20%. This means revenue of approximately $1,500 million to $1,553 million.

It also reaffirmed that it expects EBITDA growth of 5% and 8% on FY 2018’s numbers. This will mean EBITDA in the range of $454.4 million and $467.4 million.

The company’s reported net profit after tax (including costs of investments in its Early Stage Ventures business) is still expected to remain broadly in line with last year’s result.

Should you invest?

While I think SEEK is one of Australia’s highest quality companies and a great long-term investment along with the likes of industry peers REA Group Limited (ASX: REA) and Carsales.Com Ltd (ASX: CAR), it is currently going through a low growth stage while it invests heavily for the future.

I believe that these investments will ultimately result in a stronger company and position it well for long-term growth, but it is likely to come at the cost of a little short-term pain. As a result, I would class SEEK as a hold at this level.

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Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended Limited, REA Group Limited, and SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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