The SEEK Limited (ASX: SEK) share price was out of form on Friday.
The job listings giant's shares ended the day 4% lower at $28.31.
This means the SEEK share price is now down almost 14% since the start of the year.
Why did the SEEK share price tumble today?
The catalyst for this weakness in the SEEK share price today appears to have been a broker note out of Goldman Sachs this morning.
According to the note, the broker has retained its sell rating and cut its price target on the company's shares by 15% to $27.30.
Following today's decline, this implies potential downside of 3.5% for its shares.
What did the broker say?
Goldman is expecting SEEK to deliver a strong result later this month, but not one that achieves the market consensus estimate.
It said: "We expect a strong result from SEK, with 1H22 Rev/EBITDA of $483mn/$223mn, driven by +56%/+58% growth in ANZ Rev/EBITDA. However despite this strong growth, our SEK Rev/EBITDA estimates sit -3% below VA Consensus."
In addition, the broker has adjusted its price target to reflect changes to valuation multiples in line with other classifieds peers and a discount to the valuation of its Seek Growth Fund business.
It made the move on the latter following industry feedback which suggests valuation pressure on venture capital assets. Goldman highlighted a recent de-rating of Bailador Technology Investments Ltd (ASX: BTI) as proof of this.
The broker explained: "Consistent with global classifieds (and peer REA) we lower our EV/EBITDA valuation multiples 3X within our SOTP (except for Latam)."
"We also introduce a 20% discount to SEK growth fund carrying value, reflecting: (1) peer BTI.AX de-rating (c.25% decline since Oct levels when SEK last provided an ESV valuation); and (2) industry commentary suggesting valuation pressure on VC assets in Australia. Overall our SOTP-based TP decreases by c.15% to $27.30," it concluded.
