The ASX share REA Group Ltd (ASX: REA) has been one of the best stocks to own over the last decade. I think it's a great time to invest following a sizeable decline in recent months.
As the chart shows, the REA Group share price has fallen by 26% since 22 August 2025. That's a large decline for a business worth tens of billions of dollars. Not only that, but it's seen as one of the highest-quality businesses on the ASX.
If an investor is going to choose an individual business over an index investment, I think it needs to offer something better than the index does. For example, the purpose of that investment should be to deliver better returns, offer a higher dividend yield, or provide more stability.
REA Group owns a number of leading Australian businesses involved in the real estate sector. Its key business is realestate.com.au with its leading property portal. It also owns (or owns a stake in) realcommercial.com.au, flatmates.com.au, property.com.au, Mortgage Choice, PropTrack, Campaign Agent, Realtair, Simpology, Arealytics, and Athena Home Loans.
It also has exposure to international markets with REA India, Easiloan, Planitar (the maker of iGuide), and Move Inc (which operates Realtor.com in the US).
Why I think it's time to look at this ASX share with $1,000
I believe, at this lower valuation, it's more likely to deliver market-beating returns.
Realestate.com.au has a very powerful market position, and this helps the business generate strong audience demand and good levels of revenue from each typical property advertisement.
According to REA Group's FY26 first-quarter update, 12.6 million people visited realestate.com.au each month on average, with 6.7 million people exclusively using realestate.com.au. It also reported 147.9 million average monthly visits, with 111.4 million more monthly visits than the nearest competitor, on average.
Having the most properties on the portal attracts more potential buyers, which then attracts more property sellers (vendors) and so on. This powerful cycle allows the business to regularly increase prices, which helps boost the ASX share's revenue and operating margins.
For example, in the FY26 first quarter, revenue rose 4% and profits increased faster. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 5% and free cash flow surged 16%.
While growth isn't particularly strong currently, I think the business has such a strong market position that it's worthwhile investing when conditions are weaker. The international plays are a bonus that could assist in justifying a higher valuation over time, although they're not significant contributors at this stage.
Appealing REA Group share valuation
Profit growth isn't guaranteed, but the outlook seems very promising, and analysts are expecting a significant increase in profitability in the next couple of years.
According to the forecast on Commsec, REA Group is expected to generate earnings per share (EPS) of $4.80 in FY26. By FY28, EPS could climb to $7.20. That means it's currently valued at 40x FY26's estimated earnings and 27x FY28's estimated earnings.
