Stock of the day: Pexa

(AI video summary)

This video was created on 12 May 2025 for IG audiences by ausbiz.

ASX code: PXA

Pexa reaffirms guidance amid leadership change

Pexa Group, the digital property exchange platform, recently appointed Russell Cohen as chief executive officer (CEO) in late March. Despite his brief tenure, Cohen has reaffirmed the company's full-year guidance, while cautioning about potential cost forecast issues.

Pexa reported a 4% year-on-year (YoY) increase in total transaction volumes for the third quarter (Q3), with refinancing volumes up 13%. However, the company noted ongoing softness in the United Kingdom (UK) remortgage market, where volumes fell 4% and market share declined from 26% to 24.5%.

Following its first-half (H1) results, Pexa announced a $50 million share buyback.

Domain deal shifts competitive landscape

Pexa's share price has underperformed the broader market, with its UK business being a particular challenge. However, analysts view the new CEO's guidance confirmation positively, suggesting the company's turnaround efforts may be gaining momentum.

Current market pricing assigns little value to Pexa's UK operations, indicating potential upside if this segment improves. The company's cash position has also strengthened over the past two years.

Potential interest rate cuts in Australia could boost housing market activity, benefiting Pexa's core business. The company has guided for 13 - 19% revenue growth next year, down from 25% last year.

Investment considerations

Some analysts maintain a 'buy' recommendation with a $17.40 target price, suggesting upside potential from current levels. Others suggest a 'hold' rating, preferring to give the new CEO more time to implement strategic changes.

The company's performance since spinning out of Link Group has been lackluster, with some analysts suggesting Pexa needs more substantial operational improvements before becoming a compelling investment.