The Domain (ASX:DHG) share price is up 10% in 4 days to a 52-week high. Here’s why

Shares in the property classifieds group are surging right now.

| More on:
Two boys in capes running on the grass in front of their house.

Image source: Getty Images

The Domain Holdings Australia Ltd (ASX: DHG) share price has been on fire in 2021. Shares in the property technology and services business are up 27% this calendar year, including 10% gains since last Tuesday’s open.

So, what’s driving the Aussie property technology group’s valuation higher in 2021?

Why the Domain share price is up 10% in 4 days

It wasn’t long ago that shares in the online classifieds business were at a 3-month low. That was back on 17 August when Domain released its 2021 full-year results.

The Domain share price slipped despite reporting a 20.8% jump in earnings before interest, taxes, depreciation, and amortisation (EBITDA) to $102 million. Net profit for the digital services provider jumped 66% year over year to $37.9 million.

Domain reported strong growth across a number of its earnings segments. One big contributor was its core digital services unit which comprises residential property listings; media, developer and commercial; and agent and property data solutions segments.

Despite slipping on results day, the Domain share price has surged higher in the 6 weeks following the result. Continued strength in the Aussie property market and a record-low interest rate are certainly helping.

Domain makes money from the listings on its website. That means if the property market is hot, like it is right now, business should be booming. A hot market results from significant buying demand, and there are often sellers looking to cash in on that by listing their places for sale.

As a result, the Domain share price is now just 0.3% shy of a new 52-week high after a broad market rebound to finish last week.

Foolish takeaway

Shares in the Aussie property technology and digital services group have continued to have a strong run in 2021. Investors will be watching the property classifieds group closely when trading kicks off on Monday morning.

Should you invest $1,000 in Domain right now?

Before you consider Domain, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Domain wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor Ken Hall 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 Bruce Jackson.

More on 52-Week Highs