Barely 6 weeks after it was issued, Seek’s revenue guidance for FY23 was cut. This led to a 5% sell-off in shares this morning, but it is still in positive territory in FY23.
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Seek revenue guidance cut from A$1.26bn to $1.245bn
Seek’s revenue guidance was only cut by 1.2%, from $1.26bn to $1.245bn. Shares in the company fell by 5% this morning. Despite today’s losses, shares are still up on a YTD basis.
An over-reaction?
You could argue this was an over-reaction given that its EBITDA and NPAT guidance was unchanged and reiterated. However, three things may be of concern to investors.
First, it gave a warning that job ad volumes were moderating. The company wasn’t specific beyond that general warning – it did not state the extent to which they were moderating and how long it was expected. Granted, it is clearly not too vehement if Seek’s revenue guidance is only being downgraded by 1%.
Second, the company’s unchanged EBITDA and NPAT guidance was assumed to be offset by lower than assumed operating expenditure. And third, the fact that the company’s guidance was downgraded so soon after it was iterated.
Ultimately, only time will tell if its guidance holds. But investors may be forgiven for being sceptical amidst 4-decade high inflation.
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