Why Domain’s Share Price is Down a Further 7% Today

At time of writing, shares in Domain Holdings Australia Limited [ASX:DHG] are down a further 7.4% today.

Trading at $2.58, this represents its lowest share price since it first came on the market in November 2017.

Take a look at its steep plunge below:

domain holdings monthly chart

Source: marketindex.com.au

Last week we covered Domain’s crushing 12.8% loss.

This week seems to be going much the same.

Domain isn’t the only stock that could hurt your portfolio — get the names of five stocks set to have a potentially bad year in our free report here.

Continuing negative sentiment from last week

Last week brought a negative reaction due to softening revenue numbers coming out of the company.

This week brings a continuation of that sentiment, perhaps increased by further downward movements of Fairfax Media Limited [ASX:FXJ].

It is important to know that both these companies’ futures are linked, as Fairfax owns 51% of Domain.

Today, Fairfax’s share price is down 1.9% and the company buying Fairfax, Nine Entertainment is also down 3.8%.

Difficult media environment hurting Domain

Domain is struggling to monetise its digital product quick enough to cope with a drop in its print products — losing 1% in revenue this year.

Digital transformation has been hard on traditional media outlets, and has affected a range of media stocks.

For instance, Seven West Media is down to 82 cents from a high of $7.31 in December 2009.

Adding to their difficulty in doing this is the fact that REA, owner of realestate.com.au, is dominating Domain in revenue.

Domain’s revenue is 26.6% of REA’s and as a result it is trying to diversify its revenue streams.

For instance, Domain is currently investing in its transaction services which include utility switching, loan and insurance products — but this sector is yet to become profitable.

Only time will tell if this strategy will pay off, but for now it looks like tough times for Domain.

Regards,

Ryan Clarkson-Ledward,
For Market & Money


Ryan Clarkson-Ledward is a junior analyst for Markets & Money. Ryan has degrees in both communication and international business. His priority is bringing you the latest price updates on stocks through ASX updates, as well as supporting Sam Volkering with background research. As part of the team at Markets & Money his aim is to provide unbiased and relevant news for readers. Ryan’s work with Sam is designed to provide research that complements Sam’s analysis for small-cap and technology stocks. Together, their objective is to break through all the jargon and give you the hard facts to inform your investment decision-making. Ryan writes for:


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