Is SEEK (ASX:SEK) a Buy Despite Recent Market Cap Loss?

In the volatile world of equities, short-term market fluctuations often obscure long-term value creation. SEEK Limited (ASX:SEK), a global leader in online recruitment, has recently faced a 4.7% share price drop in a single week, eroding AU$467 million from its market cap [1]. Yet, a deeper dive into its financials and strategic trajectory reveals a compelling case for long-term investors.

From Loss to Profitability: A Structural Turnaround

SEEK’s transformation from a AU$0.17-per-share loss in FY2024 to a AU$0.67 earnings per share (EPS) in FY2025 underscores its operational resilience [2]. This turnaround is reflected in robust margins: a 22.35% net profit margin and a 59.57% gross margin in the latest quarter [3]. Over five years, the company has compounded earnings at 18% annually, outpacing many peers in the tech and services sectors. Such consistency suggests a durable business model, even amid macroeconomic headwinds.

Market Cap Volatility vs. Long-Term Growth

While SEEK’s market cap dipped 23.04% in 2024, this was an anomaly in an otherwise upward trend. From 2005 to 2025, its market cap grew from $469.88 million to $6.18 billion, a 13.47% compound annual growth rate [4]. The recent 19.32% increase in 2025 further illustrates investor confidence in its long-term prospects. Short-term volatility, as data from Yahoo Finance notes, should not overshadow the broader narrative of value creation [2].

Dividends and Total Shareholder Return (TSR)

SEEK’s dividend policy has been a cornerstone of shareholder returns. In 2025, it plans to distribute fully franked dividends of 22¢ (interim) and 24¢ (final), maintaining a yield of ~1.46% [1]. Over five years, these payouts have contributed to a 51% total shareholder return (TSR), outperforming the 39% share price return alone [2]. Even in the past 12 months, despite the recent dip, TSR reached 23%, blending capital gains and dividends [2]. This dual engine of returns—price appreciation and dividends—positions SEEK as a defensive yet growth-oriented play.

Analyst Sentiment and Price Targets

Analysts remain bullish. Eighteen of the 20 recent ratings are “Buy,” with an average price target of AU$30.40—9.5% above the September 2025 closing price of AU$27.76 [2]. High-end targets, such as Morgan Stanley’s AU$32.50, reflect confidence in SEEK’s ability to scale its recruitment platform and expand into adjacent markets. The absence of “Sell” ratings further underscores the consensus view that the recent selloff is overblown.

Strategic Rationale for Investors

The key question for investors is whether the recent market cap loss represents a buying opportunity. Historically, SEEK has demonstrated resilience, with its FY2025 annual report emphasizing strategic initiatives to grow placements and enhance shareholder value [2]. Its strong balance sheet, recurring revenue streams, and dominant position in the Australian and Asian job markets provide a moat against cyclical downturns.

Conclusion

While short-term volatility is inevitable, SEEK’s long-term fundamentals remain intact. Its profitability, dividend consistency, and analyst optimism paint a picture of a company that rewards patience. For investors with a five-year horizon, the recent dip may be less a warning sign and more an invitation to participate in a business that has consistently created value—despite the noise.

**Source:[1] Even though SEEK (ASX:SEK) has lost AU$467m market cap in last 7 days, shareholders are still up 51% over 5 years [https://finance.yahoo.com/news/even-though-seek-asx-sek-031800372.html][2] Appendix 4E and FY2025 Annual Report [https://www.listcorp.com/asx/sek/seek-limited/news/appendix-4e-and-fy2025-annual-report-3228362.html][3] Seek Ltd (SEK) Financial Summary [https://au.investing.com/equities/seek-ltd-financial-summary][4] SEEK Limited (SKLTY) Market Cap & Net Worth [https://stockanalysis.com/quote/otc/SKLTY/market-cap/]