Seek: AI Moat to Be Visible in Sustained Yield Strength
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UBS maintains a Buy rating on Seek (SEK.AX) with a 12-month target price of A$24.30, revised down from A$27.20 due to declining valuations across global online classified advertising peers. Seek delivered first-half fiscal 2026 results broadly in line with expectations. The standout metric was yield growth, which surged 17% year-over-year across both the ANZ and Asian markets.
This yield expansion was driven by dynamic pricing and higher adoption of AI-powered products like Advanced Ads. Despite broader market caution regarding long-term AI headwinds, UBS remains confident in Seek’s competitive moat. The platform tracks over 750 million actions daily, while Advanced Ads penetration reached 16% in ANZ and 11% in Asia. Seek continues capturing share from traditional recruitment agencies as companies internalize HR functions.
UBS raised its ANZ fiscal 2026 yield growth forecast to 12%, reflecting better-than-expected penetration rates. Volume growth remains pegged at negative 1.5% due to potential further rate hikes. Seek currently trades at 11 times fiscal 2027 estimated EBITDA, over one standard deviation below its five-year average. UBS finds the valuation attractive, projecting low-double-digit earnings growth over the next three years, supported by controlled spending and steady margin expansion.