Australian Finance Group Ltd. (AFG) AI Stock Analysis

• Market Cap: AU$595.69M
• Dividend Yield: 3.55%
• Average Volume (3M): 746.79K
• Price to Earnings (P/E): 20.0
• Beta (1Y): 0.95
• Revenue Growth: 9.49%
• EPS Growth: -0.36%
• Country: AU
• Employees: 317
• Sector: Financial
• Sector Strength: 82
• Industry: Financial - Mortgages
• EPS (TTM): 0.06
• Shares Outstanding: 270,769,040
• 10 Day Avg. Volume: 775,537
• 30 Day Avg. Volume: 746,791
• PEG Ratio: -0.17
• Price to Book (P/B): 2.38
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.27
• 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$1.80
• Price Target Upside: -18.18% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 74 Outperform
• Price Target: AU$2.50 ▲(13.64%Upside)

Australian Finance Group Ltd. demonstrates strong technical momentum and robust revenue growth, which are significant positive factors. However, high leverage and valuation concerns present risks that temper the overall score.

Australian Finance Group Ltd. Business Overview & Revenue Model

Company Description

Australian Finance Group Limited, together with its subsidiaries, engages in the mortgage broking business in Australia. It operates in two segments, Aggregation and AFG Home Loans. The company is involved in the mortgage origination and management of home and commercial loans, and consumer asset finance; and distribution of own branded home loan products. It offers business loans, such as equipment finance, inventory finance, franchisee loans, debtor finance, commercial property finance, and working capital finance. The company also offers Suite360 platform, commercial and business broking, smart marketing platform, and analytics and business data solutions. The company was formerly known as Australian Finance Group Pty Ltd. Australian Finance Group Limited was incorporated in 1994 and is headquartered in West Perth, Australia.

How the Company Makes Money

AFG makes money through a diversified revenue model primarily centered on its mortgage broking services. The company earns commissions and fees from financial institutions for successfully arranging loans and financial products through its broker network. These fees are typically a percentage of the loan value and are paid by banks and lenders as a reward for bringing them business. In addition to commissions, AFG also generates income from the aggregation of loans, leveraging its large volume of business to negotiate better rates and terms from lenders, which in turn attracts more brokers to its platform. Furthermore, AFG has expanded its revenue streams by offering additional financial services, such as insurance products, which provide supplementary income through insurance policy commissions. The company's strategic partnerships with major banks and financial institutions are significant contributors to its earnings, ensuring a steady flow of commission-based revenue.

Australian Finance Group Ltd. Financial Statement Overview

Summary

Australian Finance Group Ltd. shows a robust revenue growth trend, strong gross profit margins, and effective equity utilization, contributing positively to financial health. However, the high debt-to-equity ratio and declining net profit and free cash flow margins highlight potential risks. The company needs to focus on improving profitability and managing leverage to enhance financial stability and reduce risk exposure.

Income Statement

Australian Finance Group Ltd. has demonstrated a positive growth trajectory, with a revenue increase from AUD 689.5 million in 2020 to AUD 1.097 billion in 2024, reflecting a significant revenue growth rate. The gross profit margin has also improved, indicating enhanced operational efficiency. However, net profit margin has decreased from 5.52% in 2020 to 2.64% in 2024, suggesting challenges in maintaining profitability. Overall, the income statement shows strong revenue growth but pressure on net profitability.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio, increasing from 16.85 in 2020 to 23.52 in 2024, which is a potential risk factor, indicating high leverage. However, the return on equity has improved from 21.37% in 2020 to 14.90% in 2024, which shows effective use of equity to generate profits. The equity ratio has decreased slightly, highlighting increased reliance on debt financing. While there is financial stability, the high leverage poses significant risks.

Cash Flow

The company's cash flow analysis indicates a decline in free cash flow from AUD 38.28 million in 2020 to AUD 20.94 million in 2024, representing a negative growth trend. The operating cash flow to net income ratio is healthy, suggesting efficient cash generation relative to profits. However, the free cash flow to net income ratio has decreased, indicating challenges in maintaining free cash flow levels. While operational efficiency is evident, declining free cash flow growth is a concern.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
1.16B	1.10B	1.02B	949.34M	761.47M	689.50M
	Gross Profit
382.85M	363.15M	338.54M	204.19M	161.29M	155.90M
	EBIT
302.09M	284.46M	255.16M	137.07M	111.80M	106.38M
	EBITDA
310.50M	291.82M	262.17M	141.19M	113.86M	106.26M
	Net Income Common Stockholders
29.82M	28.98M	37.31M	38.78M	51.30M	38.08M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
54.80M	67.40M	222.24M	268.58M	241.05M	161.53M
	Total Assets
6.59B	5.98B	6.32B	6.68B	4.74B	4.09B
	Total Debt
5.15B	4.57B	4.60B	4.98B	3.46B	2.92B
	Net Debt
5.09B	4.35B	4.38B	4.71B	3.24B	2.76B
	Total Liabilities
6.37B	5.77B	6.12B	6.47B	4.54B	3.91B
	Stockholders Equity
212.60M	194.42M	179.06M	184.32M	202.98M	178.21M
Cash Flow		Free Cash Flow
38.07M	20.94M	51.23M	40.01M	52.38M	38.28M
	Operating Cash Flow
45.44M	38.78M	58.26M	52.68M	59.35M	41.26M
	Investing Cash Flow
-978.08M	13.19M	303.47M	-1.46B	-506.70M	-848.87M
	Financing Cash Flow
892.52M	-52.59M	-408.07M	1.45B	511.86M	872.32M

Australian Finance Group Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.20
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:AFG, the sentiment is Positive. The current price of 2.2 is above the 20-day moving average (MA) of 2.09, above the 50-day MA of 1.86, and above the 200-day MA of 1.64, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 64.08 is Neutral, neither overbought nor oversold. The STOCH value of 79.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:AFG.

Australian Finance Group Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AFG	74 Outperform	AU$595.69M	19.98	15.01%	3.55%	9.49%	-0.36%
Sector *	64 Neutral	$12.87B	9.81	7.76%	16985.65%	12.28%	-7.83%
BKQNF		$3.44B	17.22	5.20%	4.38%	―	―
BXRBF		$4.71B	14.86	6.89%	5.00%	―	―
SNMYF		$14.93B	16.07	9.52%	4.77%	―	―
MYS	66 Neutral	AU$740.61M	14.36	7.25%	5.02%	14.46%	-6.87%

Australian Finance Group Ltd. Corporate Events

AFG Releases Q3 FY2025 Mortgage Index

Australian Finance Group Ltd. has released its Mortgage Index for the third quarter of the financial year 2025. This announcement provides insights into the company’s mortgage activities and market trends, which are crucial for stakeholders to understand the company’s positioning and performance in the financial services industry.

Eley Griffiths Group Becomes Substantial Holder in Australian Finance Group

Australian Finance Group Ltd. has announced that Eley Griffiths Group Pty Ltd has become a substantial holder in the company as of April 9, 2025. This development indicates a significant investment interest in the company, potentially impacting its market position and signaling confidence from a notable investment group.

Australian Finance Group Updates Registry Office Address

Australian Finance Group Ltd. has announced a change in the address of its registry office in Sydney. Effective from April 14, 2025, the registry office of MUFG Corporate Markets (AU) Limited will relocate to Liberty Place on Castlereagh Street, while maintaining the same telephone numbers and postal address. This move is part of the company’s operational updates and does not impact stakeholders directly.