Seek Ltd (ASX: SEK) shares have enjoyed a strong run in 2025.
Shares in the S&P/ASX 200 Index (ASX: XJO) online job advertising company closed on Wednesday trading for $26.55 apiece. That sees the share price up 17.3% year to date, handily outperforming the 7.2% gains delivered by the benchmark index over this same period.
Atop those capital gains, Seek shares also trade on a 1.7% fully franked trailing dividend yield.
Taking a step back, Seek has underperformed the ASX 200 over the past 12 months, gaining 7.1% compared to the 8.2% gains delivered by the benchmark index.
Looking to the months ahead, however, Jack Briggs, co-portfolio manager of the Ellerston Capital mid-caps fund, forecasts some significant potential near-term share price gains (courtesy of The Australian Financial Review).
Why Seek shares could charge higher
Asked which stock in the Ellerston Capital mid-caps fund has the most near-term upside, Briggs said, "We see compelling upside in Seek."
According to Briggs:
The stock has been unloved in recent years following heavy technology reinvestment, competitive pressure in Asia, and weaker job ad volumes. Investors also questioned its cost discipline and venture capital investments.
As for why the fund first bought Seek shares, Briggs said, "We were initially drawn to Seek because of its ability to raise prices and capture more of the economics from successful hires."
He added, "Today, Seek receives around 0.8% of a candidate's salary in a successful hire, only about 10% of the total cost to hire, highlighting the potential pricing power."
Briggs is also bullish about the company's declining costs. "In the past year, we've also seen clear improvement in the issues that previously held the stock back. Technology spending has peaked, and costs have reset lower," he said.
Briggs concluded (quoted by the AFR):
The Freemium product in Asia appears to be stabilising competition, with potential early signs of market-share gains. Job-ad volumes have returned to growth, guidance has been given for cost growth, and the capital-allocation framework now points to a gradual rationalisation of the venture portfolio, with proceeds likely returned to shareholders.
What's the latest from the ASX 200 stock?
Seek shares closed up 8.0% on 19 August following the release of the company's full year FY 2025 results.
Highlights included a 1% year-on-year increase in net revenue to $1.09 billion. While adjusted profit declined 13% to $155 million.
Potentially offering support for Seek shares in FY 2026, management is forecasting net revenue to be in the range of $1.15 billion to $1.25 billion. Management also provided adjusted profit guidance in the range of $190 million to $220 million.
