REA Group Ltd (ASX: REA) shares enjoyed a big lift on Wednesday, closing up 6.9% at $254.50 apiece.
Investors were piling into the S&P/ASX 200 Index (ASX: XJO) online property listings company following the release of its full-year FY 2025 results.
As you can probably guess by yesterday's price action, those results were strong.
Today, there looks to be some profit-taking going on, with REA Group shares down 2.6% in morning trade, changing hands for $247.84 apiece.
Despite today's retrace, the ASX 200 real estate stock is up 30.8% since this time last year, well ahead of the 14.7% gains posted by the benchmark index over this same period.
And that doesn't include the $2.48 in fully franked dividends REA Group has paid (or shortly will) over the full year.
There's still time to grab that final dividend, which came in at an all-time high $1.38 per share. REA Group shares trade ex-dividend on 28 August, so you'd have to own the stock at market close on 27 August to receive that passive income payout.
But is the stock a good buy today?
Here's what the team at Macquarie Group Ltd (ASX: MQG) has to say.
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REA Group shares: Buy, hold, or sell?
Atop the 35% increase in the final dividend, REA Group shares caught investor interest yesterday. The company achieved a 15% year-on-year revenue boost to $1.67 billion.
In other core financial metrics, earnings before interest, taxes, depreciation and amortisation (EBITDA) were up 18% from FY 2024 to $969 million. Net profit after tax (excl minorities) surged 23% to $564 million.
Those net profits came in right about where Macquarie had expected.
Looking to FY 2026, the broker forecasts NPAT (excl minorities) of $651 million, up 15% from the year just past. Macquarie expects REA Group to achieve 10% revenue growth alongside an 8% increase in costs.
And Macquarie was positive on the company's financial position.
According to the broker:
REA's balance sheet position is robust with A$429m cash, supporting increased dividends (FY25 payout ratio = 58%, +4%pts yoy), which may be sustainable moving forward; albeit is dependent on M&A
Connecting the dots, Macquarie maintained its neutral rating on REA Group shares.
The broker concluded:
REA is a high-quality business with proven sustainable growth (MQe = +16% EPS CAGR, FY25-28), albeit is trading on 51x 12-months forward P/E, a 135% premium to the ASX300 Industrials. Any disruption from competition or via the new CEO re-setting expectations may impact the multiple.
Macquarie has a 12-month price target for REA Group of $255 per share.
