Seek (ASX:SEK): Down >30% in 2026, but it’s directors think its got upside

Online employment marketplace Seek (ASX:SEK) may be formally categorised as ‘Media and Entertainment’ by the ASX, although it is difficult to argue that this company is not a tech company. 

Two years ago, it seemed to be in the right place at the right time given the state of the labour market, still struggling with post-COVID labour shortages. But now, the tides have turned in that regard – it is well and truly an employers’ markets.

And as if this was not enough of a headache, it is struggling to persuade investors that it will remain relevant if AI bots can do a better job at helping people find work. 

We last wrote about Seek in July last year and it caught our eye again when its directors bought shares en-masse – 6 directors bought $3.9m worth of shares a week after the results, $2.8m of which were bought by Andrew Bassatt. Now of course, this is no guarantee that shares will go up but it is a sign the board is confident – enough to put their money where their mouths are. Still, it is no guarantee of success.

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Who is Seek?

Seek is a provider of online employment classifieds in over 18 countries globally. It runs multiple websites, including the Seek website – covering Australia and New Zealand – JobStreet, Catho and occmundial. It has 250m unique candidate visitors per annum, and 360k hirers. 

The company makes money from prospective employers that pay to have advertisements on the site. Seek also has a stake in the Seek Growth Fund that has interests in Chinese job seeker website Zhaopin and recruiting software company JobAdder. After several years of sitting under the same corporate umbrella, the Growth Fund now operates independently, albeit still owned by the parent company. Its total portfolio value was up 32% since creation, representing a 9% IRR.

Seek was founded in 1997 by Matt Rockman, Paul Bassat and Andrew Basset. Only Andrew Basset remains on the company’s board today, although he is no longer CEO, having handed the reigns to ex-CBA boss Ian Narev. Seek was listed on the ASX in April 2005 with a market capitalisation of $587m, a figure that grew to over $10bn earlier this decade. Now it is under $6bn. Let’s take a look at what led to this amount being wiped out. 

Benefited from the re-opening of the economy and labour shortages

FY21 and FY22 were solid years for Seek as the economy re-opened from pandemic hibernation. During FY22, the company made $1.1bn in revenue (up 47%) and $509.1m in EBITDA (up 53%). The company’s NPAT from continuing operations $245.5m and 81% up from FY21, although statutory NPAT from total operations was $168.8m, down 78% from the year before.

The latter set of numbers took account of discontinued operations including Zhaopin (a Chinese job site) and the Seek Growth Fund, which won’t be reflected in future results. This is because Zhaopin has been substantially sold down by Seek (but not completely), while the Seek Growth Fund will operate as a standalone business. Seek paid a dividend of 44c per share, reflecting a payout of 85% of cash NPAT less Capex, and a yield of 2.1%.  

A more difficult FY23-FY24

FY23 and FY24 were more difficult. For FY23, the company initially issued guidance of $1.25-$1.3bn in revenue (up ~16%), $560-$590m in EBITDA (up 13%) and $250-$270m NPAT (up 6%). This guidance assumed that largely positive economic conditions continued, and that costs were in line with expectations.  

In early April 2023, however, it cut its revenue guidance for FY23. It was only a 1.2% reduction, from $1.26bn to $1.245bn, but enough to send shares down 5% that morning. This was the ultimate revenue result, yet it was up 10% from the year before. The company’s reported NPAT was $202.7m, down 16% from the year before, although the adjusted figure was $255m, excluding the Growth Fund. Job volumes moderated in FY23 and job market is tight with record low unemployment.

Turning to FY24, it made $1.16bn revenue, down 17%. Now it is true that this included discontinued operations, but even revenue from continuing operations was down 6%. Its adjusted profit was $179m (down 31%) and its ‘reported’ profit was not a profit at all but a $100.9m loss. Ian Narev blamed a reduction in job ads from a record high and the impairment of its Zhaopin investment. Its Growth fund closed with a $2.1bn value, a figure up 26% since its creation, but down 9% in 12 months.

FY25 was better and FY26 is proving to be (from a results perspective

For FY25, Seek initially issued guidance of $1.02-1.14bn revenue (down again even at the upper extreme) and an adjusted profit of $130-180m. The company would go on to narrow the guidance to $1.06-1.10bn revenue and $135-160m profit and it delivered net revenue of $1.09bn and an adjusted profit of $155m, down 13%. It claimed earlier in the year that the upgrade of its ad tiers would help, plus proceeds from a partial selldown of its stake in Employment Hero – more in this in a moment.

For FY26, it guided to $1.15-1.25bn revenue and a $190-220m adjusted profit. The company released half-yearly results last week and there were good signs, so much so that the guidance was upgraded to $1.19-1.23bn revenue and a $195-215m adjusted profit. The ‘adjusted profit’ excluded the latest write down on its investment in Chinese jobs platform Zhaopin which was down from $529m to $182m.

It also appears that Seek’s tension with Employment Hero is just about over. Employment Hero was an API partner providing job posting capabilities. But Seek was it was becoming a direct competitor, offering lower cost services directly because it was sponging off Seek. Well, it didn’t use that terminology but the allegations were essentially that. For instance, sending emails to candidates after applying on Seek, suggesting they sign up to Swag so the hiring manager could contact them directly…and when they did, this was at least partially pre-populated with information obtained by Seek.

Seek eventually got a gutful and alleged Employment Hero misused candidate data and undermined trust, prompting it to terminate the API integration in mid-2025. Employment Hero consequently took Seek to Federal Court, accusing Seek of anti-competitive behaviour.

This matter was discontinued by consent in January 2026 after Employment Hero accepted Seek’s API access termination was not anti-competitive and it was reinstated on altered terms. And now Seek, having sold a $95m stake to KKR last year, wants to completely cash out and again hired Goldman Sachs. ASIC record suggest Seek retains an 18.5% stake which would be >$360m based on Employment Hero’s $2bn valuation.

AI a challenge?

Seek has not been blind to the fact that AI could be a threat and an opportunity. It hopes new AI products will attract a premium for hirers willing to pay for a better experience and more likelihood of a right outcome. These include ads sent exclusively to high-fit candidates, high exposure in search, promoting their own ads on competing ads and exclusivity on their ads. For candidates, these products can predict the likelihood of being shortlisted for a job – based on data points generated on its platform that cannot be replicated on ChatGPT.

The company spent a few months in late 2024 looking like it was going to buy reference checking software Xref (ASX:XF1) for $41m. Even though Xref’s board and an independent expert endorsed the deal, Xref’s investors said no (well 67.6% said yes, but 75% was required).

Seek shares are down 30% in 2026 and while you could put it down to the RBA’s cycle, the decline started well before it. You could argue if nothing else, it has been Ian Narev’s warnings that,’ We really need to execute well’, as a sign that the future is not guaranteed. Perhaps there is also the concern that if AI cannot create the same jobs it eliminates, there’s less of a need for Seek’s services.

Ultimately, there is only one thing Seek can do in response to address investor concerns and that is ‘prove it’. The question is: Will employers and candidates get a better experience on Seek than with AI start ups and by that a faster match? Oh and also, will they pay for it?

Analysts are confident

For the full FY26, analysts call for $1.2bn revenue (up 10%) and a $200m ‘adjusted profit’, although its statutory profit could come in under $20m given the write down.

Looking to FY27, consensus estimates are for $1.34bn revenue (up 12%) and a $257m profit. For FY28, $1.49bn revenue (up 11%) and a $321m profit. The mean target price is $25.44 per share with estimates ranging from $19.50 to $29.70 – all bullish. The company’s multiples for FY27 are 11.13x EV/EBITDA, 22.2x P/E and 0.85 PEG which all look reasonable.

More risks!

We see three further risks to Seek:

Firstly, a cyber attack, something would likely impact the company worse than Medibank considering its global reach and higher user base.

Secondly, increasing industry competition. Unlike some comparable ASX companies in the marketplace segment that have the market virtually to themselves, such as REA (ASX:REA), Seek faces competition from other platforms such as LinkedIn, CareerOne and Indeed.

And thirdly – and ironically – the tight labour market could be something that impacts Seek itself, making it difficult to attract and retain staff.

Tough to see it outperforming  

Ultimately, the company still needs to prove that it will not just survive but thrive in the new world. Moreover, it is disadvantaged in a way that stocks like Car Group and REA are not because it does not have a monopoly. So notwithstanding directors’ confidence, the reasonable multiples and solid consensus estimates, we would pass on this one right now.