S&P/ASX 200 Index (ASX: XJO) stock REA Group Ltd (ASX: REA) can't quite shake off today's wider selling action, which sees the ASX 200 down 1.3% at the time of writing.
Shares in the online property listings company were briefly in the green in morning trade but are currently down 0.5% at $233.42. That gives the company a market cap of $30.8 billion.
This still sees the REA share price up 26.8% in a year. And this doesn't include the $2.12 a share in fully franked dividends the ASX 200 stock delivered over this time, smashing the 1.0% one-year returns delivered by the benchmark index.
However, the past three weeks have been more difficult for shareholders.
On 20 February, REA closed the day trading for $266.44 a share. Meaning shares are down 12.4% since then.
While that equates to a loss for shareholders over that time, Red Leaf Securities' John Athanasiou says it could present an excellent entry point today (courtesy of The Bull).
Buying opportunity for this outperforming ASX 200 stock
"This online multinational digital advertising business specialises in property," said Athanasiou, who has a buy recommendation on the ASX 200 stock.
"A buying opportunity exists after REA shares were recently sold off following CoStar Group's unexpected takeover proposal for competitor Domain Holdings Australia," he added.
Athanasiou is referring to REA's sharp share price decline since 20 February.
On 21 February, the ASX 200 stock tumbled 11.4% after Domain Holdings Australia Ltd (ASX: DHG) received a $2.7 billion takeover offer from CoStar Group, Inc. (NASDAQ: CSGP).
As the Motley Fool's James Mickleboro noted at the time:
Investors may believe that the US$32 billion US based listings company could fund an aggressive growth strategy for Domain that threatens REA Group's domination of the local market.
However, no agreement has been reached at this stage and the Domain board is currently assessing CoStar's proposal.
Athanasiou pointed to REA's recent half-year results as one reason to be bullish on the company.
"REA recently delivered strong first half year results in fiscal year 2025 that exceeded expectations," he said.
Among the highlights from those results, REA reported revenue of $873 million for the six months, up 20% year on year. And net profit was up 26% to $314 million, which saw management boost the fully franked interim dividend by 26% to $1.10 per share.
Rounding off why this outperforming ASX 200 stock is a buy today, Athanasiou is optimistic that REA's sizeable moats can protect its core business from would-be competitors.
According to Athanasiou:
As the dominant player in Australian real estate classifieds, REA boasts a premium product suite and a data driven platform that sets it apart from competitors.
CoStar's potential entry introduces new competition. But, in our view, it's unlikely to have a significant impact given REA's scale and entrenched market presence.
