The REA Group's share price dropped 10% following the release of its Q3 results. The underlying cause of the share price drop was a dramatic slowing in the growth of the business and a failure to meet analyst expectations.
During the first 3 quarters (9 months), the business delivered a relatively healthy 21% year on year revenue growth. However, in the last quarter (Q3), that growth dropped to just 13%. Analysts, such as Deutsche Bank, had projected second half FY 2015 revenue growth of 25%. EBITDA growth for the 3rd quarter was 19%, also behind analyst expectations of 35%.
In its press release, the REA Group blamed lower listings volumes, Easter and elections in 2 Australian States for the lower than expected results.