Australian Ethical Investment Ltd (AEF) AI Stock Analysis

• Market Cap: AU$471.26M
• Dividend Yield: 2.7%
• Average Volume (3M): 152.18K
• Price to Earnings (P/E): 10.5
• Beta (1Y): 0.71
• Revenue Growth: 18.80%
• EPS Growth: 74.51%
• Country: AU
• Employees: 140
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.13
• Shares Outstanding: 113,830,080
• 10 Day Avg. Volume: 113,253
• 30 Day Avg. Volume: 152,183
• PEG Ratio: 0.45
• Price to Book (P/B): 17.98
• Price to Sales (P/S): 6.09
• P/FCF Ratio: 27.34
• 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$7.50
• Price Target Upside: 52.13% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.23
• Revenue Forecast (FY): AU$128.48M

• Rating: 64 Neutral
• Price Target: AU$4.50 ▼(-8.72% Downside)
• Action: Reiterated Date: 12/02/25
• Date: Action: Reiterated 12/02/25

Australian Ethical Investment Ltd's strong financial performance is the most significant factor, supported by robust revenue growth and profitability. However, bearish technical indicators and a relatively high P/E ratio suggest caution. The lack of earnings call and corporate event data limits further insights.

Positive Factors

Revenue & Profitability

Sustained revenue growth and high margins reflect a durable fee-based business model and operational efficiency. Consistently strong gross and net margins support reinvestment, margin resilience through cycles, and long-term ability to fund product development and shareholder returns.

Low Leverage & High ROE

Very low leverage and an exceptionally high ROE provide financial flexibility and efficient capital deployment. This capital structure supports durable investment in growth, resilience to client outflows, and the capacity to pursue opportunities without overreliance on external financing.

Strong Cash Conversion

Cash generation that closely matches reported earnings indicates high quality earnings and reliable fee cashflows. Strong cash conversion underpins sustainable dividend capacity, funds organic growth, and provides a buffer for strategic investments despite short-term FCF growth volatility.

Negative Factors

Declining Free Cash Flow Growth

A large drop in free cash flow growth materially limits the company's ability to invest, pursue acquisitions, or expand distribution. If the trend persists, it could constrain capital allocation, reduce strategic optionality, and pressure funding for product development or higher shareholder distributions.

Margin & Equity Growth Pressure

Erosion in gross margin and slowing equity growth signal emerging cost pressures and reduced internal capital accumulation. Over time this can compress profitability, limit scale benefits, and constrain balance sheet capacity to support new products or larger institutional mandates.

AUM & Fee Sensitivity

Business revenues are structurally exposed to AUM fluctuations and market cycles: sustained market downturns or net outflows reduce fee income. This creates persistent revenue volatility risk for a manager reliant on percentage fees, impacting long-term cash generation and planning.

Australian Ethical Investment Ltd Business Overview & Revenue Model

Company Description

Australian Ethical Investment Ltd. is a publicly owned investment manager. The firm launches and manages equity, fixed income, and balanced mutual funds for its clients. It invests in the public equity and fixed income markets across the globe. The firm invests in education, energy, electricity transmission & distribution, government, health & wellbeing, food production, telecommunications, transport, recycling and waste management, sustainable products & materials, Information technology, software and professional services, media, property, recreation financial services. The firm employs fundamental analysis to create its portfolios. Australian Ethical Investment Ltd. was founded in 1986 and is based in Sydney, Australia.

How the Company Makes Money

AEF primarily makes money by charging fees for managing client assets in its ethical investment products. Its main revenue stream is funds management income (typically management fees calculated as a percentage of funds under management) earned on Australian Ethical-branded managed funds and superannuation options; as funds under management rise or fall, this fee base generally changes accordingly. The company may also earn performance-related fees on certain products where permitted by product terms, but if specific performance-fee arrangements are not disclosed in available information, this is null. Additional revenue can include administration and member-related fees associated with superannuation products (e.g., account-based administration charges) where applicable. As a financial services provider, it can also generate other operating income such as interest income on cash balances and potentially service fees, but if specific categories or amounts are not available in the provided context, this is null. Key factors influencing earnings include net inflows/outflows (client contributions and redemptions), investment market performance (which affects asset values and therefore percentage-based fees), product mix (managed funds vs superannuation), and operating scale. Significant external relationships typically include the use of third-party custodians, administrators, registry services, and platform/distribution partners in the Australian wealth market; however, specific named partnerships are null if not explicitly available.

Australian Ethical Investment Ltd Financial Statement Overview

Summary

Australian Ethical Investment Ltd shows strong financial health with robust revenue growth and profitability. The low leverage and high return on equity highlight effective financial management. However, the declining free cash flow growth poses a potential risk that needs to be addressed to sustain long-term financial stability and growth.

Income Statement

Australian Ethical Investment Ltd has demonstrated strong revenue growth with a 7.75% increase in the latest year. The company maintains healthy profitability margins, with a gross profit margin of 67.11% and a net profit margin of 16.92%. The EBIT and EBITDA margins are also robust at 31.49% and 31.87%, respectively, indicating efficient operational management. However, the slight decline in gross profit margin from previous years suggests potential cost pressures.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.054, indicating minimal leverage and financial risk. The return on equity is impressive at 49.93%, showcasing effective use of shareholder funds to generate profits. The equity ratio stands at 58.00%, suggesting a stable capital structure. However, the decrease in stockholders' equity growth compared to previous years might be a concern for future expansion.

Cash Flow

The cash flow statement reveals a decline in free cash flow growth by 61.6%, which could impact future investment capabilities. Nevertheless, the operating cash flow to net income ratio of 1.01 and free cash flow to net income ratio of 0.99 indicate strong cash generation relative to earnings. The company needs to address the negative trend in free cash flow growth to maintain financial flexibility.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	126.41M	119.38M	100.49M	81.10M	70.78M	58.71M
Gross Profit	93.98M	80.12M	81.75M	65.79M	59.38M	47.70M
EBITDA	39.92M	38.05M	25.27M	15.67M	15.22M	16.32M
Net Income	24.04M	20.20M	11.53M	6.58M	9.51M	11.12M
Balance Sheet
Total Assets	69.90M	69.73M	51.23M	47.30M	41.94M	39.47M
Cash, Cash Equivalents and Short-Term Investments	39.92M	38.84M	36.39M	32.73M	27.39M	27.81M
Total Debt	3.00M	2.18M	2.77M	2.20M	834.00K	1.57M
Total Liabilities	23.66M	29.28M	21.09M	20.55M	17.27M	15.29M
Stockholders Equity	46.25M	40.45M	30.14M	26.75M	24.66M	24.18M
Cash Flow
Free Cash Flow	28.67M	26.61M	21.27M	16.00M	15.40M	15.41M
Operating Cash Flow	28.82M	26.89M	22.29M	16.20M	16.16M	15.50M
Investing Cash Flow	-20.45M	-21.85M	-11.17M	-4.07M	-4.12M	-120.00K
Financing Cash Flow	-16.02M	-12.59M	-11.86M	-6.79M	-12.46M	-9.00M

Australian Ethical Investment Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.93
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:AEF, the sentiment is Negative. The current price of 4.93 is above the 20-day moving average (MA) of 4.67, above the 50-day MA of 4.67, and below the 200-day MA of 6.06, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 32.83 is Neutral, neither overbought nor oversold. The STOCH value of 6.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:AEF.

Australian Ethical Investment Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RPL	79 Outperform	AU$905.03M	8.64	14.51%	4.92%	21.81%	-43.93%
FID	73 Outperform	AU$303.05M	9.55	32.32%	4.00%	10.61%	23.34%
EQT	69 Neutral	AU$545.75M	7.80	8.50%	4.63%	4.26%	79.41%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
AEF	64 Neutral	AU$471.26M	10.53	55.44%	2.70%	18.80%	74.51%
MAF	46 Neutral	AU$1.27B	174.79	2.39%	1.85%	35.30%	44.24%

Australian Ethical Investment Ltd Corporate Events

Australian Ethical Investment Appoints New Director With No Current Equity Stake

Australian Ethical Investment Ltd has announced the appointment of Karen Orvad as a director effective 11 March 2026, signalling a change in the composition of its board. The company disclosed that Orvad currently holds no relevant interests in the company’s securities and has no interests in related contracts, suggesting her role begins without existing equity or contractual ties that might affect governance or independence.

The most recent analyst rating on (AU:AEF) stock is a Hold with a A$4.50 price target. To see the full list of analyst forecasts on Australian Ethical Investment Ltd stock, see the AU:AEF Stock Forecast page.

Australian Ethical Tightens Governance on Trading of Its Securities and Products

Australian Ethical Group has formalised its Share Trading and Dealing in Australian Ethical Products Policy, outlining governance over how securities in the group and its products may be traded. The policy, approved by the boards of Australian Ethical Investment Ltd and Australian Ethical Superannuation in February 2026, assigns accountability to the Chief Risk Officer and sets a review cycle to ensure it remains current.

The framework details trading rules, insider trading investigations, conflicts of interest management, and training and awareness obligations for relevant personnel. It also specifies escalation paths for policy breaches and whistleblower protections, reinforcing the group’s risk management and compliance posture for stakeholders and market participants.

The most recent analyst rating on (AU:AEF) stock is a Hold with a A$4.50 price target. To see the full list of analyst forecasts on Australian Ethical Investment Ltd stock, see the AU:AEF Stock Forecast page.

Australian Ethical Sets Date for FY26 Half-Year Results Update

Australian Ethical Investment Ltd has flagged the release of its FY26 half year results, to be presented by Managing Director and CEO John McMurdo alongside CFO Mark Simons on 26 February 2026. The announcement signals an upcoming update on the company’s financial performance and strategic progress, which will be closely watched by investors interested in the growth and competitiveness of ethical investment offerings in the Australian market.

The most recent analyst rating on (AU:AEF) stock is a Hold with a A$4.50 price target. To see the full list of analyst forecasts on Australian Ethical Investment Ltd stock, see the AU:AEF Stock Forecast page.

Australian Ethical lifts profit and FUM as platform overhaul underpins growth

Australian Ethical Investment reported a strong first half to 31 December 2025, with underlying profit after tax rising 25% to $14.4 million and statutory net profit up 42% to $13.3 million, supported by a 13% lift in revenue to $65.8 million and improved cost efficiency. Funds under management reached $14.08 billion, nearly triple the level of five years ago, while the board declared a fully franked interim dividend of 8 cents per share, up 60%.

The company continued to reshape its operating platform, completing the migration of its superannuation members to a single GROW administration platform and rolling out the Charles River front-office system for fixed income and equities, moves aimed at cost savings and institutional-grade capability. Positive net inflows, particularly in superannuation, and resilient investment performance offset the redemption of a low‑margin $0.25 billion institutional mandate, leaving revenue largely unaffected and positioning the business for further growth in both super and non-super investment products.

The most recent analyst rating on (AU:AEF) stock is a Hold with a A$4.50 price target. To see the full list of analyst forecasts on Australian Ethical Investment Ltd stock, see the AU:AEF Stock Forecast page.

Australian Ethical Investment Declares Interim Dividend for December Half-Year

Australian Ethical Investment Ltd has declared a fully franked interim dividend of AUD 0.08 per ordinary share for the six-month period ended 31 December 2025. The dividend will trade ex-dividend on 5 March 2026, with a record date of 6 March 2026 and payment scheduled for 23 March 2026, providing income to shareholders and signalling the board’s confidence in the company’s ongoing financial performance.

The announcement formalises the company’s regular capital return program and offers investors clearer visibility on near-term cash flows from their holdings. By maintaining a dividend in line with its reporting cycle, Australian Ethical reinforces its positioning as a stable, income-generating ethical investment option within the Australian funds management sector, which may support investor sentiment and share valuation.

The most recent analyst rating on (AU:AEF) stock is a Hold with a A$4.50 price target. To see the full list of analyst forecasts on Australian Ethical Investment Ltd stock, see the AU:AEF Stock Forecast page.

Australian Ethical Sets Date for Half-Year 2026 Results and Investor Briefing

Australian Ethical Investment Ltd will release its financial results for the half year ended 31 December 2025 on 26 February 2026, accompanied by a webcast briefing hosted by CEO and Managing Director John McMurdo and CFO Mark Simons, followed by a Q&A session for investors and other stakeholders. The scheduled results announcement and investor briefing underscore the company’s commitment to transparency and ongoing engagement with the market as it continues to grow its ethically focused funds management and superannuation business.

The most recent analyst rating on (AU:AEF) stock is a Hold with a A$5.00 price target. To see the full list of analyst forecasts on Australian Ethical Investment Ltd stock, see the AU:AEF Stock Forecast page.

Australian Ethical Investment Ceases to Be Substantial Holder in Australian Clinical Labs

Australian Ethical Investment Ltd has notified the ASX that it has ceased to be a substantial holder in Australian Clinical Labs Limited, lodging a formal notice confirming its relevant interest in the pathology company’s voting securities fell below the substantial holding threshold on 15 January 2026. The change, documented in a statutory Form 605 and involving State Street Australia Ltd as custodian, signals a reduction in Australian Ethical’s exposure to Australian Clinical Labs and may indicate a portfolio rebalancing or strategic shift in its ethical investment holdings, with potential implications for the shareholder base and trading liquidity of Australian Clinical Labs shares.

The most recent analyst rating on (AU:AEF) stock is a Hold with a A$6.00 price target. To see the full list of analyst forecasts on Australian Ethical Investment Ltd stock, see the AU:AEF Stock Forecast page.

Australian Ethical Holds FUM at $14bn as Super Growth and Platform Efficiencies Offset Mandate Loss

Australian Ethical Investment reported funds under management of $14.08 billion as at 31 December 2025, a 1% decline over the quarter as positive retail and wholesale inflows, particularly in superannuation, were offset by negative investment performance and the redemption of a low‑margin $0.25 billion institutional banking mandate following Australian Unity Bank’s sale to Bank Australia. The company highlighted stronger superannuation member growth driven by enhanced digital marketing and the completed transition of its retail super fund administration to GROW, which is already delivering cost efficiencies, alongside ongoing implementation of the Charles River investment platform to build an institutional‑grade, scalable operating base. Management expects that lost mandate revenue will be neutralised by platform simplification and cost savings, is building a pipeline in middle‑market channels, has filled key executive roles including a new COO and CRO, and continues to strengthen its positioning in ethical investing, underlined by recent ESG super and pension product awards.

The most recent analyst rating on (AU:AEF) stock is a Hold with a A$6.00 price target. To see the full list of analyst forecasts on Australian Ethical Investment Ltd stock, see the AU:AEF Stock Forecast page.

Australian Ethical Exits Substantial Holder Position in Shriro Holdings

Australian Ethical Investment Ltd has notified the ASX that it has ceased to be a substantial holder in Shriro Holdings Limited, following changes in its relevant interests in Shriro’s voting securities as at 29 December 2025. The move, formalised via a regulatory notice, indicates that Australian Ethical’s shareholding in Shriro has fallen below the substantial holding threshold, potentially reflecting portfolio rebalancing or a shift in exposure to the stock, and may modestly alter Shriro’s register composition and the influence of institutional ethical investors on the company.

The most recent analyst rating on (AU:AEF) stock is a Hold with a A$5.50 price target. To see the full list of analyst forecasts on Australian Ethical Investment Ltd stock, see the AU:AEF Stock Forecast page.

Australian Ethical Sets Out Key 2026 Reporting and Dividend Dates

Australian Ethical Investment Ltd has released its 2026 reporting calendar, outlining key dates for quarterly funds under management and flows updates, half-year and full-year financial results, dividend ex-dates, record and payment dates, director nomination deadlines, and its Annual General Meeting. The schedule provides stakeholders with clear visibility on the company’s financial reporting and governance milestones for 2026, supporting planning for investors, analysts and shareholders, although the company notes that the dates may be adjusted for operational reasons.

The most recent analyst rating on (AU:AEF) stock is a Hold with a A$5.50 price target. To see the full list of analyst forecasts on Australian Ethical Investment Ltd stock, see the AU:AEF Stock Forecast page.