Alfabs Australia Ltd. (AAL) AI Stock Analysis

• Market Cap: AU$93.86M
• Dividend Yield: 7.8%
• Average Volume (3M): 113.68K
• Price to Earnings (P/E): 21.4
• Beta (1Y): 0.47
• Revenue Growth: -1.55%
• EPS Growth: 232.03%
• Country: AU
• Employees: N/A
• Sector: Industrials
• Sector Strength: 72
• Industry: Conglomerates
• EPS (TTM): <0.01
• Shares Outstanding: 286,588,000
• 10 Day Avg. Volume: 84,412
• 30 Day Avg. Volume: 113,680
• PEG Ratio: 0.04
• Price to Book (P/B): 1.61
• Price to Sales (P/S): 1.10
• P/FCF Ratio: -4.87
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: AU$0.36
• Price Target Upside: 2.86% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.03
• Revenue Forecast (FY): AU$112.90M

• Rating: 62 Neutral
• Price Target: AU$0.37 ▲(6.00% Upside)
• Action: Reiterated Date: 03/05/26
• Date: Action: Reiterated 03/05/26

The score is driven primarily by solid underlying financial performance (good profitability and balance sheet) offset by weak cash flow (negative free cash flow). Technicals are a notable headwind with a downtrend and bearish momentum despite oversold readings. Valuation is supported by a high dividend yield, with a moderate P/E.

Positive Factors

Strong operational margins

Sustained EBIT and EBITDA margins indicate durable operational efficiency and project execution capability. High margins provide a buffer against cost volatility, support reinvestment and dividend capacity, and reflect competitive advantages in engineering and fabrication over the next several months.

Healthy capital structure and ROE

A balanced leverage profile with an improved debt-to-equity ratio and strong ROE suggests effective use of capital and financial resilience. This capital structure supports bidding on larger projects and provides flexibility to manage cycles without immediate solvency pressure.

Sector exposure to resources and energy

Focus on heavy engineering for resources, energy and industrials aligns the business with structural infrastructure demand. Long project timelines and recurring maintenance/service needs in these sectors provide revenue visibility and durable demand over a multi-month horizon.

Negative Factors

Negative free cash flow

Negative free cash flow despite positive operating cash generation signals limited cash left for capex, debt reduction, or shareholder returns. Over several months this can force external financing, constrain growth projects, and weaken liquidity if not corrected.

Sharp decline in gross margin

A material drop in gross margin suggests worsening input costs, pricing pressure, or adverse project mix. If persistent, this erosion can compress operating profit and reduce the sustainability of current EBIT/EBITDA margins, requiring pricing or cost-structure fixes.

Rising total debt trend

An upward trend in total debt raises refinancing and interest-service risk, especially with negative free cash flow. Growing leverage can limit strategic flexibility, increase financing costs, and amplify downside in a weaker demand environment over the medium term.

Alfabs Australia Ltd. Business Overview & Revenue Model

Company Description

Alfabs Australia Limited engages in the mining equipment and engineering business in Australia. It operates through Mining, Engineering, and Other segments. The company offers equipment hire services to operators in the underground black coal mining industry; and supplies mining consumables and spare parts to mining operators, as well as offers repair, maintenance, overhaul, and construction of underground mining equipment. It also provides engineering fabrication, engineering services, protective coatings, forklift, access, logistic, and labor hire services for engineering and site-based maintenance and upgrade projects. In addition, the company offers consumables products, such as construction and drilling consumables, ground-engaging tools, industrial hoses and fittings, lubricants and oils, custom engraved decals, PPE and safety supplies, office stationery and supplies, and commercial and industrial cleaning supplies through retail stores. The company was incorporated in 2024 and is headquartered in Kurri Kurri, Australia.

How the Company Makes Money

Alfabs Australia Ltd. generates revenue through multiple streams, primarily by offering manufacturing and engineering services that cater to the needs of the mining and construction industries. Key revenue streams include the fabrication of custom steel products, sales of mining and construction equipment, and ongoing maintenance and repair services for heavy machinery. The company also benefits from long-term contracts and partnerships with major industry players, which provide a steady flow of projects and revenue. Additionally, Alfabs engages in project management services, which contributes to its earnings by providing comprehensive solutions from planning to execution, ensuring that clients receive end-to-end support.

Alfabs Australia Ltd. Financial Statement Overview

Summary

Income statement strength (score 75) shows consistent revenue growth and solid EBIT/EBITDA margins, but the sharp decline in gross margin is a key risk. Balance sheet is healthy overall (score 70) with improved leverage and strong ROE, though rising total debt needs monitoring. Cash flow is the main drag (score 60) due to negative free cash flow and weak cash conversion.

Income Statement

Alfabs Australia Ltd. has shown consistent revenue growth over the years, with a notable increase of 4.52% in the latest year. The company maintains a strong EBIT margin of 19.59% and an impressive EBITDA margin of 29.22%, indicating efficient operational management. However, the gross profit margin has decreased significantly from 63.17% to 31.74%, which could be a concern for future profitability. The net profit margin improved to 12.82%, reflecting better cost control and profitability.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.53, indicating a balanced approach to leveraging. Return on equity is strong at 18.76%, showcasing effective use of shareholder funds. The equity ratio stands at 49.21%, suggesting a solid capital structure. However, the increase in total debt over the years could pose a risk if not managed carefully.

Cash Flow

Operating cash flow remains positive, but the free cash flow is negative, which is a concern for liquidity and future investments. The free cash flow to net income ratio is negative, indicating that the company is not generating sufficient free cash flow relative to its net income. The operating cash flow to net income ratio is 0.31, showing moderate cash generation efficiency.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022
Income Statement
Total Revenue	107.12M	94.95M	96.27M	84.42M	75.48M
Gross Profit	28.55M	30.13M	60.82M	24.54M	14.15M
EBITDA	24.22M	27.74M	18.26M	14.49M	9.75M
Net Income	7.75M	12.17M	3.55M	4.90M	3.20M
Balance Sheet
Total Assets	136.71M	131.81M	115.78M	74.13M	66.12M
Cash, Cash Equivalents and Short-Term Investments	4.89M	8.18M	23.60M	2.95M	3.87M
Total Debt	51.93M	34.40M	25.54M	17.43M	20.26M
Total Liabilities	75.26M	66.95M	59.04M	48.63M	45.44M
Stockholders Equity	61.44M	64.87M	56.74M	24.49M	20.01M
Cash Flow
Free Cash Flow	-18.05M	-21.49M	-2.13M	2.12M	-1.69M
Operating Cash Flow	12.53M	10.63M	17.34M	13.51M	12.22M
Investing Cash Flow	-29.36M	-30.60M	-19.81M	-11.39M	-13.65M
Financing Cash Flow	16.07M	4.56M	23.12M	-2.90M	4.62M

Alfabs Australia Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:AAL, the sentiment is Negative. The current price of 0.35 is below the 20-day moving average (MA) of 0.41, below the 50-day MA of 0.43, and below the 200-day MA of 0.42, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 35.73 is Neutral, neither overbought nor oversold. The STOCH value of 22.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:AAL.

Alfabs Australia Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CLX	71 Outperform	AU$180.00M	3.47	11.37%	4.59%	1.33%	-11.07%
KSC	70 Neutral	AU$454.33M	10.20	8.00%	4.73%	-9.67%	-6.49%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AAL	62 Neutral	AU$93.86M	21.45	20.02%	7.80%	-1.55%	232.03%
DBI	51 Neutral	AU$2.48B	84.90	8.17%	4.73%	13.19%	14.79%
HNG	51 Neutral	AU$116.62M	-36.91	-2.96%	9.09%	43.14%	-136.36%

Alfabs Australia Ltd. Corporate Events

Alfabs Director Increases Equity Exposure Through New Option Grant

Alfabs Australia Ltd. has disclosed a change in director William Wavish’s interests, indicating he and his spouse collectively hold a significant stake in the company through ordinary shares and options. The announcement underscores the company’s use of equity-based remuneration, which can help align director incentives with shareholder interests.

Wavish was granted 500,000 new options exercisable at $0.60 and expiring in February 2030 under an employee incentive scheme approved at the company’s November 2025 annual general meeting. The additional long‑dated options, issued for no cash consideration, modestly increase his exposure to Alfabs’ future share price performance and reinforce the governance framework around incentive-based compensation.

The most recent analyst rating on (AU:AAL) stock is a Hold with a A$0.51 price target. To see the full list of analyst forecasts on Alfabs Australia Ltd. stock, see the AU:AAL Stock Forecast page.

Alfabs Australia to Issue 7.27 Million Unquoted Options and Rights Under Incentive Plan

Alfabs Australia Ltd. has notified the market of the planned issue of 7,270,000 unquoted options and performance rights under its employee incentive scheme. The new equity instruments, not intended to be quoted on the ASX, will be issued on 25 February 2026 and are designed to reward and retain staff while tying compensation more closely to long-term company performance.

The sizeable grant of unquoted securities reflects the company’s continued reliance on equity-based remuneration as a strategic tool in a competitive labour market. For shareholders, the move implies potential future dilution but also signals a commitment to strengthening alignment between key employees and the company’s growth objectives.

The most recent analyst rating on (AU:AAL) stock is a Hold with a A$0.51 price target. To see the full list of analyst forecasts on Alfabs Australia Ltd. stock, see the AU:AAL Stock Forecast page.

Alfabs lifts revenue, ramps capex as earnings dip and dividend paused

Alfabs Australia reported December 2025 half-year revenue of $55.6 million, up 28%, but EBITDA fell to $9.5 million as non-recurring impacts from the Dartbrook mine administration, additional investment in key personnel and softer engineering margins weighed on earnings. Strong performances in Asset Remediation, Bat Bags and Protective Coatings were offset by weaker results in the core Mine Hire and Engineering divisions, prompting a $2.0 million cost-savings push and suspension of the interim dividend to preserve capital as net debt rose to $37.8 million.

The group invested $15.3 million in capex, largely in the mining hire fleet, including a major continuous miner overhaul and completion of its first AX10 unit, positioning the business for targeted earnings growth from FY 2027. Alfabs is also in advanced due diligence on a sub-$20 million acquisition of a complementary underground and hire equipment business to be funded with additional debt, while it reviews its balance sheet and capital management settings to support medium- and long-term growth.

The most recent analyst rating on (AU:AAL) stock is a Hold with a A$0.51 price target. To see the full list of analyst forecasts on Alfabs Australia Ltd. stock, see the AU:AAL Stock Forecast page.

Alfabs Revenue Climbs but Profit Slumps in Mixed Half-Year Result

Alfabs Australia Limited reported a strong 28% rise in revenue to $55.6 million for the half-year ended 31 December 2025, but profitability declined sharply as EBITDA fell 24% to $9.5 million and EBIT dropped 60% to $3.4 million. Net profit attributable to shareholders slid 77% to $1.3 million, with basic earnings per share dropping to 0.46 cents, while the company still paid a final dividend of 1.7 cents per share, contributing to a reduction in net tangible assets per share from 24.25 cents to 22.59 cents.

The company did not gain or lose control of any entities and has no dividend reinvestment plan in place, indicating a relatively stable corporate structure despite the earnings pressure. The interim financial statements underwent a review by auditors, providing assurance over the reported figures at a time when margins appear to be tightening even as top-line growth accelerates, a dynamic that shareholders and lenders will be monitoring closely.

The most recent analyst rating on (AU:AAL) stock is a Hold with a A$0.51 price target. To see the full list of analyst forecasts on Alfabs Australia Ltd. stock, see the AU:AAL Stock Forecast page.

Alfabs Australia Announces Director Departure

Alfabs Australia Limited announced that Mark Harrison has ceased to be a director as of December 3, 2025. The notice details Harrison’s relevant interests in securities, including 2,500,000 options and shares held through entities MWH Nominees No 1 Pty Ltd and MCH Management Pty Ltd. This change in directorship may impact the company’s governance structure and could influence stakeholder perceptions, given Harrison’s significant holdings in the company.

The most recent analyst rating on (AU:AAL) stock is a Hold with a A$0.42 price target. To see the full list of analyst forecasts on Alfabs Australia Ltd. stock, see the AU:AAL Stock Forecast page.