Rightmove Lowers 2026 Profit Outlook as AI Spend Ramps; Shares Drop
Rightmove cut its operating profit growth guidance for 2026 to 3%-5%, citing a step-up in investment in artificial intelligence across internal systems, its consumer app, and search tools. The stock fell as much as 28% intraday, hitting a 52-week low, before trimming losses to around 13%.
The company framed the spend as a deliberate acceleration to build new capabilities, including exploring agent-facing AI applications. Management expects operating profit growth to re-accelerate after 2028, targeting around 12% annually by 2030.
What changed
- Guidance: 2026 operating profit growth now seen at 3%-5%, versus 9% forecast for this year.
- Investment focus: AI to upgrade internal systems, consumer app, search tools, and potential agent tools.
- Market reaction: Shares fell up to 28% before partly recovering; new 52-week low printed.
- Analyst view: UBS put its rating and price target under review, noting guidance implies a 5%-19% downgrade to FY28 operating profit versus Visible Alpha consensus.
- Timeline: Management guides to stronger profit growth after 2028, targeting ~12% annually by 2030 as AI investments mature.
Why it matters for investors
This is a classic "investment hump." Near-term margins get squeezed as spend accelerates; the payoff, if execution lands, shows up in the out-years. Guidance implies consensus resets are coming for FY28, and that typically pressures multiples in the short run.
The update also lands during broader market nerves around AI-heavy names, which can magnify price swings. For holders, the question is whether the product roadmap and data advantages justify a lower near-term growth profile.
How to frame the risk/reward
- Near term: Expect lower operating leverage and heavier opex as AI hiring, infrastructure, and product work scale up.
- Medium term: Watch for tangible product wins-better search relevance, higher agent productivity, and improved consumer engagement-translating into pricing power or share gains.
- Long term: If AI features become core to agent workflows and consumer discovery, earnings growth can re-accelerate post-2028 as spend normalizes.
What to watch next
- Visibility on AI spend: cadence, categories (people, compute, data), and expected payback periods.
- Product milestones: shipping timelines for app/search upgrades and agent-facing tools; adoption rates and engagement KPIs.
- Monetization signals: changes in average revenue per advertiser, churn, and upsell of premium tiers tied to AI features.
- Updated guidance: any revisions at interim updates as projects move from build to rollout.
Wider market backdrop
The move comes amid renewed concern over an AI-driven equity bubble, with U.S. tech weakness spilling into Asia and Europe before markets partly stabilized. That context likely amplified the downside reaction to any "spend now, profit later" message.
Bottom line
Rightmove is trading short-term profitability for potential product leadership. The market wants proof: clear feature launches, adoption, and monetization. Until then, expect a valuation reset and a tighter focus on execution milestones.
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Note: UBS commentary references consensus data from Visible Alpha. Learn more about consensus methodologies here:
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