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The market in which Trade Me operated had changed.
Historically, it had been able to achieve earnings growth through general price increases on its core websites.
Over time, Trade Me's ability to make those increases had waned.
Instead, growth would come from developing value-add options and integrating new services.
That would come at a cost, namely increased complexity and the need to continually develop new enhancements, she said.
"We do not see competition replacing Trade Me's market place and classified overall positions. We do see competition hindering Trade Me's ability to make meaningful price increases and we also see it gradually chipping away in some areas, particularly in the new goods marketplace,'' Ms Kinnaird said.
AutoWeb had been a successful acquisition for Trade Me, adding both revenue and earnings growth.
Forsyth Barr also saw a significant opportunity from Trade Me insurance, but that was in its infancy and meaningful growth remained some way off.
New services represented opportunities in the long term, but they must be proven, she said.
Trade Me expected single-digit operating profit growth for the 2016 financial year.
Forsyth Barr predicted flat earnings as a result of increased capital investment over the past two years.
The company noted growth would be weighted towards the second half.
"Effectively, we should expect an underwhelming first-half result in February.''
What has changed
Earnings: No change
Target share price: Up 30c to $3.90
Rating: Downgrade to underperform