SEEK's valuation conundrum
The company is hated by the sharemarket for its VC 'black box'.
In January 2008, with the Global Financial Crisis in full flight, stocks dropped like a stone, rumours of impending bank collapses ran rampant, and everyone agreed that Australian companies would not hire a new employee for the next decade. In that febrile atmosphere, shares of employment search engine SEEK plunged to an all-time low of 7.3 times forward cash earnings (EV/EBITDA). By the thinking of the time, when an online advertising business was trading on that kind of multiple in the background somewhere Lead Belly was humming the tune of "Goodnight Irene".
In March 2026, Australia's banking system has never been so robust, the equities market is near all-time highs and the jobs market is strong. Yet this week SEEK shares plunged to a level where the core employment business was being valued on a forward cash earnings multiple of 7.3 times[[My calculation of this multiple will vary significantly from those that appear on Bloomberg terminals. I have removed roughly $2 billion of early stage venture assets (which do not contribute to EBITDA) from the EV valuation of the core business.]].
In 20 years of crunching numbers for broking houses, I never saw such a financially robust, sector-dominating e-commerce business trading on such a miserable multiple. Today, in the market consensus view, the SEEK business model is in trouble.
