Seek Shares (SEK) Hit Decade Low as Pressures Mount: The Latest

Seek Ltd shares (ASX: SEK) have fallen to their lowest level in ten years, closing down 5.33% at A$12.78 having hit a new low at A$12.70 intraday. The company is dealing with a raft of pressures; with cyclical headwinds, earnings pressure, and strategic uncertainty leaving bulls struggling to find support after a brutal 45% decline year-to-date.

The employment marketplace operator, once a darling of the Australian tech sector, now trades at levels not seen since 2015, underperforming the broader ASX indices as markets grapple with fundamental questions about the company’s earnings trajectory and competitive positioning in an increasingly challenging environment.

The SEK share price has broken through multiple support zones over recent months, with each bounce attempt quickly fading as sellers overwhelm buyers. Volume has remained elevated during the decline, although has slowed on the day at 0.62x average.

Fundamental Pressures

At the heart of Seek’s troubles lies a pronounced cyclical slowdown in Australian and New Zealand job advertising volumes. Official data from Jobs & Skills Australia and Seek’s own indices show online job advertisements running materially below prior-year levels, with mid-single to double-digit percentage declines versus pandemic-era peaks.

The company’s most recent half-year FY26 results confirmed the challenging operating environment, with management acknowledging continued declines in job ad volumes across the ANZ core business. While Seek has managed to reaffirm or modestly upgrade revenue guidance by leaning on yield growth through better product mix, pricing optimisation, and premium placement offerings, markets remain sceptical about the sustainability of this strategy against a shrinking volume base.

Financial performance over the past three years tells a sobering story. Revenue growth, which averaged approximately 12.5% annually over the five-year period through FY25, has essentially flatlined over the most recent three-year stretch from FY23 to FY25, with a compound annual growth rate of roughly negative 0.5%. Free cash flow per share has similarly stagnated around A$0.88, while adjusted profit figures have come under significant pressure, with one recent half showing a 21% decline despite management’s efforts to defend the top line.

Strategic Setbacks

Beyond cyclical headwinds, Seek has faced several strategic setbacks that have compounded investor anxiety. The company recently announced plans to exit its stake in Employment Hero, while simultaneously tightening its longer-term outlook for FY26. The announcement triggered an immediate negative share price reaction, raising questions about capital allocation discipline and the success of non-core investments.

Further complicating the picture is an ongoing writedown related to Zhaopin, Seek’s Chinese jobs platform. The writedown, tied to a strategic review and efforts to streamline the asset’s ownership structure amid management changes, has diluted the perceived value of the international portfolio and highlighted execution risks in the Asian expansion strategy that was once viewed as a key growth driver.

Following a recent results call, shares fell approximately 4% as broker Citi flagged concerns that management commentary on ad volumes and implications for FY26-FY27 forecasts disappointed markets. The tension between management’s attempts to maintain guidance through yield initiatives and the underlying reality of falling volumes has become increasingly difficult for markets to reconcile.

Layered atop cyclical weakness are growing structural concerns about Seek’s competitive moat. LinkedIn has been steadily strengthening its recruiting tools and expanding its presence in both active job-seeking and passive candidate segments, potentially eroding Seek’s dominance in higher-value white-collar recruitment.

The rise of artificial intelligence-powered recruiting solutions and integrated HR technology stacks presents another long-term challenge, with some analysts warning that traditional job boards could face disintermediation or at minimum, constraints on pricing power. These structural concerns make it harder for markets to distinguish between temporary macro weakness and permanent share loss, further depressing the multiple investors are willing to pay.

Value Opportunity or Value Trap?

Despite the precipitous decline, sell-side analysts remain surprisingly bullish on aggregate, with consensus ratings still clustering around “Buy” and twelve-month price targets in the low-A$20s range, implying substantial upside from current levels. Some brokers, including CLSA, have maintained elevated targets, viewing the current weakness as cyclical and arguing that Seek’s pricing power and sticky franchise will shine through once hiring normalises.

However, current valuation work suggests fair value may sit closer to A$13-18, much nearer current trading levels, and flags that Seek’s historically premium multiples may no longer be justified given recent performance. The debate has crystallised into a classic value versus value trap discussion, with bulls arguing the stock is mispriced due to cyclical fear, while bears counter that fundamentals have consistently under-delivered and further multiple compression may be warranted if macro conditions fail to improve.

With unemployment rising in data released this week, time will tell if that has any positive impact in upcoming periods. The path forward for Seek shares may hinge on whether Australian employment conditions stabilise and eventually recover, allowing job ad volumes to inflect positively and validate management’s assertions that current weakness is cyclical rather than structural. With the share price now at levels not seen in a decade, you have to take a long look back for previous areas of support, although in what is a changing environment, it remains uncertain whether there is much weight behind them. A difficult day, and another difficult week for beleaguered SEK holders.