Australian Ethical Investment Ltd (AEF) AI Stock Analysis

• Market Cap: AU$487.19M
• Dividend Yield: 2.7%
• Average Volume (3M): 152.18K
• Price to Earnings (P/E): 23.7
• Beta (1Y): 0.31
• 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

Profitability and Margins

Sustained high gross and healthy net margins indicate durable operational efficiency and pricing power in its funds management business. For an asset manager, these margins support reinvestment in product development, distribution and consistent earnings generation across market cycles.

Low Leverage and Strong ROE

Minimal leverage and a high return on equity reflect conservative capital structure and efficient use of shareholder funds. This reduces financial risk during downturns and gives flexibility to fund growth initiatives, buybacks or dividends without stressing the balance sheet.

Cash Conversion

Near‑one-to-one conversion of earnings into operating and free cash flow shows the business reliably turns profits into cash. That cash generation supports sustainable distributions, product investment and resilience versus earnings volatility inherent in asset management.

Negative Factors

Declining Free Cash Flow Growth

A large drop in free cash flow growth materially reduces the company’s capacity to self‑fund new initiatives, absorb shocks, or increase shareholder returns. If this trend persists it could force reliance on external financing or slow product and distribution investment.

Slower Equity Growth

Slowing growth in shareholders’ equity can constrain balance sheet capacity for acquisitions, platform expansion or larger product launches. Over time it may reflect weaker retained earnings or distribution pressures that limit the firm’s ability to scale.

Margin Pressure Trend

Even a modest downward trend in gross margin suggests rising cost or fee pressure in the business. For an investment manager, sustained margin compression can erode profitability, reducing funds available for growth, marketing and talent retention over the medium term.

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 generates revenue primarily through management fees charged on the assets under management (AUM) in its investment funds. These fees are typically a percentage of the total assets managed, which can vary based on the type of fund and the level of service provided. In addition to management fees, AEF may also receive performance fees when investment returns exceed predetermined benchmarks. The company further diversifies its revenue streams through its superannuation offerings, which involve annual fees based on the account balances of members. Significant partnerships with financial advisors and platforms that promote ethical investing contribute to AEF's earnings by expanding its customer reach and enhancing its brand visibility in the market. Overall, AEF's commitment to ethical investing attracts a dedicated client base that values both financial returns and social responsibility.

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	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	119.38M	100.49M	81.10M	70.78M	58.71M
Gross Profit	80.12M	81.75M	65.79M	59.38M	47.70M
EBITDA	38.05M	25.27M	15.67M	15.22M	16.32M
Net Income	20.20M	11.53M	6.58M	9.51M	11.12M
Balance Sheet
Total Assets	69.73M	51.23M	47.30M	41.94M	39.47M
Cash, Cash Equivalents and Short-Term Investments	38.84M	36.39M	32.73M	27.39M	27.81M
Total Debt	2.18M	2.77M	2.20M	834.00K	1.57M
Total Liabilities	29.28M	21.09M	20.55M	17.27M	15.29M
Stockholders Equity	40.45M	30.14M	26.75M	24.66M	24.18M
Cash Flow
Free Cash Flow	26.61M	21.27M	16.00M	15.40M	15.41M
Operating Cash Flow	26.89M	22.29M	16.20M	16.16M	15.50M
Investing Cash Flow	-21.85M	-11.17M	-4.07M	-4.12M	-120.00K
Financing Cash Flow	-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: Negative
• 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 Negative. The current price of 4.93 is above the 20-day moving average (MA) of 4.52, above the 50-day MA of 4.86, and below the 200-day MA of 6.26, indicating a bearish trend. The MACD of -0.17 indicates Negative momentum. The RSI at 32.44 is Neutral, neither overbought nor oversold. The STOCH value of 31.29 is Neutral, 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
FID	73 Outperform	AU$336.20M	16.93	32.31%	4.00%	10.61%	23.34%
EQT	69 Neutral	AU$572.54M	14.14	8.50%	4.63%	4.26%	79.41%
RPL	68 Neutral	AU$1.20B	8.78	5.73%	4.92%	21.81%	-43.93%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
AEF	64 Neutral	AU$487.19M	23.67	58.10%	2.70%	18.80%	74.51%
MAF	45 Neutral	AU$1.66B	142.79	8.97%	1.85%	35.30%	44.24%

Australian Ethical Investment Ltd Corporate Events

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.

Australian Ethical Investment Responds to APRA’s License Conditions

Australian Ethical Investment Ltd (AEF) has announced that the Australian Prudential Regulation Authority (APRA) has imposed additional license conditions on its subsidiary, Australian Ethical Superannuation Pty Ltd (AES). These conditions require AES to appoint an independent expert to review related-party arrangements with AEF. AEF does not believe these conditions will materially affect the price or value of its securities, and the company remains confident in its governance and operational strategies. The review is seen as an opportunity to strengthen AES’s decision-making processes without financial penalties, and AEF anticipates no negative impact on members’ retirement savings.

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 Releases Corporate Governance Statement

Australian Ethical Investment Ltd has released its Corporate Governance Statement, which aligns with the ASX Corporate Governance Council Principles and Recommendations. This announcement underscores the company’s dedication to maintaining high standards of corporate governance, potentially enhancing its reputation and trust among stakeholders.

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 Superannuation Faces APRA License Conditions

Australian Ethical Superannuation Pty Ltd, a trustee of Australian Ethical Investment Ltd, has received additional license conditions from APRA, requiring an independent review of related-party arrangements. Despite these conditions, the company assures that members’ retirement savings remain secure, and the fund has achieved strong returns in the past year. The company has proactively enhanced its governance processes and remains committed to ethical investing and members’ financial interests.

The most recent analyst rating on (AU:AEF) stock is a Hold with a A$6.50 price target. To see the full list of analyst forecasts on Australian Ethical Investment Ltd stock, see the AU:AEF Stock Forecast page.