SEEK's 50% AI Scare Gives Way to a More Grounded Debate Over FY27 Guidance

A brutal AI-driven sell-off met fund managers who say the fear was overdone, just as cautious guidance introduced a more concrete concern.

31 Aug 2026 · 4 min read

SEEK fell more than 50 percent from its late-2025 highs above $28 to a May 2026 low near $12, swept up in the same AI-disruption panic that hit REA Group and Xero, even as the job classifieds company kept delivering double-digit revenue and profit growth throughout the sell-off. The stock has since recovered to around $15, but a cautious FY27 outlook has replaced AI fear as the main thing fund managers are now debating.

A 50 percent de-rating despite solid results

First Samuel detailed a strong first-half FY26 result released in February: sales revenue up 21 percent to $646.6 million, net revenue up 12 percent to $600.9 million, EBITDA up 19 percent to $267.1 million and adjusted profit up 35 percent to $104.1 million, supported by a 17 percent increase in paid job ad yield. ECP Asset Management said that yield gain stood in stark contrast to fears that AI-driven agentic commerce would erode SEEK's audience, a threat it noted had yet to show up anywhere in the numbers. Katana Asset Management pointed to an attractive valuation at historically low multiples, and Paradice Investment Management, which held an overweight position, said it increased its stake after concluding the AI-driven de-rate across the technology sector had become overdone.

Perennial Partners summed up the scale of the mispricing by August, noting SEEK and REA Group had each fallen more than 50 percent from their late-2025 highs to recent lows as investors adopted what it called a shoot-first approach to AI disruption risk, without anyone being able to clearly explain the mechanism by which it would actually occur, while both companies continued to report strong results from dominant, deeply entrenched market positions.

At this stage, however, nobody seems to be able to explain exactly how this would occur, and the companies continue to hold dominant market positions, with entrenched network effects.

— Perennial Partners, Monthly Report, July 2026

Not everyone bought the dip

Some managers took the opposite side. Oracle Advisory Group sold its position during the March quarter, and Australian Eagle Asset Management initiated a new short position, citing uncertainty around SEEK's platform unification strategy as its Asia business shifts toward a freemium model diverging from the original Australia and New Zealand approach, compounded by declining ANZ volumes and AI concerns against what it saw as an still-elevated valuation. Wilson Asset Management moved to a sell rating in July, pointing to soft June job listing numbers as a sign hiring demand is more cautious beneath the headline employment data, and arguing SEEK's competitive moat looks less differentiated than other classifieds businesses over the longer term. Investors Mutual Limited stayed at hold, unconvinced the employment cycle has bottomed with unemployment still around 4.5 percent, and flagging a longer-term risk that employers could increasingly recruit directly through platforms like LinkedIn rather than paying for SEEK job ads.

Bulls say the AI panic is overdone

Yarra Capital Management argued SEEK is well advanced on its own AI capabilities and AI-enabled products, and that the dual-sided nature of its marketplace, serving both recruiters and job seekers, leaves it well placed to defend its market-leading position. First Samuel went further, saying SEEK's management team did the best job of any Australian technology company it covers of explaining the opportunities and threats AI poses to its business model, and that on pure valuation grounds SEEK offers more upside than any other local technology name it follows.

In pure valuation terms, SEEK has the most upside of the Australian-based technology names we cover.

— First Samuel, Article, March 2026

August's result: strong today, cautious about tomorrow

Pendal Group described SEEK's FY26 result as in line but still impressive, with revenue up 10 percent and net profit up 29 percent, though the market's focus shifted quickly to FY27 guidance, which disappointed on an assumption that volumes decline 5 percent, with a softer outlook in Asia too as growth there improves only marginally against currency headwinds. First Samuel added detail on the guidance gap: at the midpoint of FY27 guidance, revenue growth slows to around 5 percent, EBITDA growth to 6 percent and adjusted profit growth to just 3 percent, even as FY26's EBITDA margin improved from 42 percent to 44 percent. First Samuel has long argued SEEK's dominant marketplace economics should support materially higher margins than it has delivered, and said cost control, while still the missing link, is now moving closer to what it considers the business's real potential.

What fund managers say they are watching next is whether the conservative FY27 volume assumptions prove overly cautious or accurate, how SEEK's platform unification and Asia freemium transition plays out, and whether further evidence accumulates that AI is enhancing rather than disrupting SEEK's marketplace, the same argument now playing out at REA Group and other ASX classifieds names caught in the same sell-off.