Australian Ethical Investment Ltd (AEF) AI Stock Analysis

• Market Cap: €688.46M
• Dividend Yield: 1.65%
• Average Volume (3M): 140.66K
• Price to Earnings (P/E): 45.9
• Beta (1Y): 1.06
• Revenue Growth: 19.11%
• EPS Growth: 24.72%
• Country: AU
• Employees: 140
• Sector: Financial
• Sector Strength: 79
• Industry: Asset Management
• EPS (TTM): 0.10
• Shares Outstanding: 113,419,780
• 10 Day Avg. Volume: 110,583
• 30 Day Avg. Volume: 140,663
• PEG Ratio: -1.83
• Price to Book (P/B): 14.01
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 23.42
• 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: €6.69
• Price Target Upside: 14.22% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 77 Outperform
• Price Target: AU$7.00 ▲(19.45%Upside)

Australian Ethical Investment Ltd receives a strong overall score due primarily to its robust financial performance and technical indicators suggesting bullish momentum. The stock's valuation appears high, which slightly tempers the overall score, but the company's growth potential and financial stability offer a compelling investment case.

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

Australian Ethical Investment Ltd generates revenue primarily through management fees charged on the investment products it offers. These fees are typically a percentage of the assets under management (AUM), providing a steady income stream that grows as the company's funds attract more investors and increase in value. Additionally, performance fees may be earned when the funds exceed predetermined benchmarks. AEF’s focus on ethical investing attracts a specific clientele interested in sustainable and responsible investing, which helps in differentiating the company in a competitive market. Furthermore, AEF may engage in partnerships with other financial institutions to expand its product offerings and distribution channels, thereby increasing its market reach and potential revenue.

Australian Ethical Investment Ltd Financial Statement Overview

Summary

Australian Ethical Investment Ltd presents a strong financial position with robust revenue growth, stable profitability, and effective cash management. The low leverage and high equity ratio underscore financial stability, while consistent improvements in profitability metrics indicate operational efficiency. The company is well-positioned for future growth with its solid financial foundation.

Income Statement

Australian Ethical Investment Ltd shows strong revenue growth with a five-year CAGR of approximately 16.5%. The company maintains a stable gross profit margin around 66% and a net profit margin improving from 8.2% to 11.5% over the last two years, indicating enhanced operational efficiency. The EBIT and EBITDA margins are robust, with EBIT margin rising to 22.1% reflecting effective cost management.

Balance Sheet

The balance sheet is strong with a low debt-to-equity ratio of 0.09, suggesting minimal leverage risk. The equity ratio stands at 58.8%, indicating a healthy balance between equity and total assets. Return on equity has shown a positive trend, with a recent ROE of 38.3%, demonstrating effective use of equity to generate profits.

Cash Flow

The company exhibits a healthy cash flow position, with a free cash flow growth rate of 33% in the most recent year. The operating cash flow to net income ratio is approximately 1.93, indicating strong cash generation ability relative to net income. The free cash flow to net income ratio is 1.84, demonstrating effective cash management and reinvestment capabilities.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
110.80M	100.49M	81.10M	70.78M	58.71M	49.90M
	Gross Profit
73.41M	66.53M	65.79M	59.38M	47.70M	41.44M
	EBIT
55.80M	22.26M	14.40M	13.81M	15.15M	14.24M
	EBITDA
33.35M	23.62M	15.67M	15.02M	16.32M	15.13M
	Net Income Common Stockholders
14.82M	11.53M	6.58M	9.51M	11.12M	9.46M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
32.57M	36.39M	32.73M	27.39M	27.81M	21.43M
	Total Assets
55.83M	51.23M	47.30M	41.94M	39.47M	33.82M
	Total Debt
2.48M	2.77M	2.20M	834.00K	1.57M	1.64M
	Net Debt
-20.10M	-33.62M	-30.53M	-26.55M	1.38M	1.48M
	Total Liabilities
20.74M	21.09M	20.55M	17.27M	15.29M	13.00M
	Stockholders Equity
35.09M	30.14M	26.75M	24.66M	24.18M	20.82M
Cash Flow		Free Cash Flow
26.78M	21.27M	16.00M	15.40M	15.41M	8.09M
	Operating Cash Flow
27.21M	22.29M	16.20M	16.16M	15.50M	8.85M
	Investing Cash Flow
-11.17M	-11.17M	-4.07M	-4.12M	-120.00K	613.00K
	Financing Cash Flow
-10.32M	-11.86M	-6.79M	-12.46M	-9.00M	-6.86M

Australian Ethical Investment Ltd Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 5.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:AEF, the sentiment is Neutral. The current price of 5.86 is below the 20-day moving average (MA) of 6.00, above the 50-day MA of 5.63, and above the 200-day MA of 5.05, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 49.64 is Neutral, neither overbought nor oversold. The STOCH value of 45.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
AEF	77 Outperform	€688.46M	45.92	47.73%	1.65%	19.11%	24.72%
Sector *	64 Neutral	$12.85B	9.81	7.79%	78.20%	12.23%	-7.93%
AMLTF		$2.04B	17.38	4.84%	2.44%	―	―
IOOFF		$1.53B	―	-7.21%	2.65%	―	―
NNA		€849.24M	6.24	23.27%	7.85%	―	―
PIJ		€169.91M	10.47	9.63%	11.64%	―	―
FSB		€3.84B	105.79	11.42%	0.56%	―	―

Australian Ethical Investment Ltd Corporate Events

Australian Ethical Investment Ltd Acquires Substantial Holding in IPH Limited

Australian Ethical Investment Ltd has announced its initial substantial holding in IPH Limited, with a voting power of 5.06% through 13,187,892 ordinary shares. This move signifies Australian Ethical’s strategic interest in IPH Limited, potentially impacting its market positioning and offering new opportunities for stakeholders in the ethical investment sector.

Australian Ethical Investment Adjusts Stake in Urbanise.com

Australian Ethical Investment Ltd has announced a change in its substantial holding in Urbanise.com Limited, with its voting power decreasing from 9.11% to 7.44%. This adjustment in shareholding reflects a strategic decision that may influence the company’s influence and decision-making power within Urbanise.com Limited.

Australian Ethical Investment Increases Stake in Siteminder

Australian Ethical Investment Ltd has increased its stake in Siteminder Limited, as indicated by a recent change in the interests of a substantial shareholder. The company’s voting power in Siteminder has risen from 5.04% to 6.31%, reflecting a strategic move that may enhance its influence and decision-making capacity within the company, potentially impacting Siteminder’s future direction and operations.

Australian Ethical Investment Increases Stake in Nuix Limited

Australian Ethical Investment Ltd has increased its stake in Nuix Limited, as indicated by a change in the interests of a substantial shareholder. The company’s voting power in Nuix Limited has risen from 5.10% to 6.10%, reflecting a strategic move to strengthen its influence and investment in the company. This change could potentially impact Nuix’s shareholder dynamics and Australian Ethical’s positioning within the market.

Australian Ethical Reports Resilient Performance Amid Market Volatility

Australian Ethical Investment Ltd reported a 1% decline in Funds Under Management (FUM) to $13.10 billion for the third quarter of FY25, amid market volatility. Despite this, the company maintained positive net flows in its superannuation business and values-aligned channels, with retail and wholesale flows totaling $0.11 billion. The transition of superannuation administration to GROW has been completed, leading to moderated outflows and growth in super member numbers. Institutional net outflows were reported at $0.06 billion, primarily due to fixed income funds and mandates, but the impact on revenue was minimal. The company’s diversified asset base helped mitigate the effects of significant market volatility, with a negative investment performance of 1.6% compared to a 4% loss in the ASX300.

Australian Ethical Investment Ltd Appoints New Director

Australian Ethical Investment Ltd has announced the appointment of Brian Bissaker as a director, effective from April 15, 2025. The initial director’s interest notice indicates that Bissaker currently holds no relevant interests in the company’s securities or contracts, which suggests a neutral impact on the company’s operations and stakeholder interests.

Australian Ethical Investment Ltd Appoints Brian Bissaker to Board

Australian Ethical Investment Ltd has announced the appointment of Brian Bissaker to its board. Bissaker brings extensive experience in the financial services sector, having held leadership roles at Colonial First State, Virgin Money Australia, and BT Funds Management, among others. His appointment is expected to strengthen the company’s strategic direction and governance, leveraging his deep industry knowledge and leadership experience.

Australian Ethical Investment Acquires Substantial Stake in PEXA Group

Australian Ethical Investment Ltd has become a substantial holder in PEXA Group Limited, acquiring a 5.05% voting power through 8,967,342 ordinary shares. This acquisition signifies a strategic move by Australian Ethical to expand its influence and stake in companies that align with its ethical investment philosophy, potentially impacting its market positioning and stakeholder interests.

Australian Ethical Investment Acquires Substantial Holding in Nuix Limited

Australian Ethical Investment Ltd has announced its initial substantial holding in Nuix Limited, acquiring a 5.10% voting power with 16,875,771 ordinary shares. This strategic move marks a significant step in Australian Ethical’s investment strategy, potentially enhancing its influence in the market and aligning with its ethical investment principles.

Australian Ethical Investment Reduces Stake in Kinatico Limited

Australian Ethical Investment Ltd has announced a change in its substantial holding in Kinatico Limited, with its voting power decreasing from 10.06% to 7.75%. This change reflects a reduction in the number of ordinary shares held, which may impact the company’s influence in Kinatico Limited and could have implications for its investment strategy and stakeholder interests.

Australian Ethical Investment Becomes Substantial Holder in Siteminder Limited

Australian Ethical Investment Ltd has become a substantial holder in Siteminder Limited, acquiring a 5.04% voting power through 14,131,015 ordinary shares. This move signifies a strategic investment by Australian Ethical, potentially enhancing its influence in the market and aligning with its ethical investment strategy, which may impact stakeholders by reinforcing the company’s commitment to sustainable investments.