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Australian Finance Group Ltd. (AU:AFG)
ASX:AFG
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Australian Finance Group Ltd. (AFG) AI Stock Analysis

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AU:AFG

Australian Finance Group Ltd.

(Sydney:AFG)

Rating:63Neutral
Price Target:
AU$2.00
▼(-6.10%Downside)
Australian Finance Group Ltd. exhibits strong revenue growth and attractive dividend yield, which are key strengths. However, the high leverage and declining net profit and cash flow margins are significant risks. Technical indicators signal weak momentum, impacting the overall score negatively.

Australian Finance Group Ltd. (AFG) vs. iShares MSCI Australia ETF (EWA)

Australian Finance Group Ltd. Business Overview & Revenue Model

Company DescriptionAustralian Finance Group Ltd. (AFG) is one of Australia's leading mortgage broking firms, offering a wide range of financial solutions to individuals and businesses. Established in 1994, AFG operates across the residential and commercial mortgage sectors, providing access to a vast network of over 70 lenders. The company's core services include mortgage broking, business finance solutions, and financial planning support, making it a key player in the Australian financial services landscape.
How the Company Makes MoneyAFG primarily generates revenue through its mortgage broking services. The company earns commissions from lenders for loans facilitated through its network of brokers, which constitutes a significant portion of its income. AFG also benefits from trail commissions, which are ongoing payments from lenders based on the outstanding balance of loans arranged by its brokers. Additionally, AFG has diversified its revenue streams by offering business finance products and financial planning services, enhancing its earnings potential. Strategic partnerships with financial institutions and continuous expansion of its broker network further contribute to its financial performance.

Australian Finance Group Ltd. Financial Statement Overview

Summary
Australian Finance Group Ltd. shows strong revenue growth and improved gross profit margins, indicating enhanced operational efficiency. However, the company faces challenges with a declining net profit margin and high debt-to-equity ratio, which pose significant financial risks. The decline in free cash flow also raises concerns about financial flexibility.
Income Statement
75
Positive
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
68
Positive
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
70
Positive
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.
BreakdownJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue1.10B1.02B949.34M761.47M689.50M
Gross Profit363.15M338.54M204.19M161.29M155.90M
EBITDA291.82M262.17M141.19M113.86M106.26M
Net Income28.98M37.31M38.78M51.30M38.08M
Balance Sheet
Total Assets5.98B6.32B6.68B4.74B4.09B
Cash, Cash Equivalents and Short-Term Investments67.40M222.24M268.58M241.05M161.53M
Total Debt4.57B4.60B4.98B3.46B2.92B
Total Liabilities5.77B6.12B6.47B4.54B3.91B
Stockholders Equity194.42M179.06M184.32M202.98M178.21M
Cash Flow
Free Cash Flow20.94M51.23M40.01M52.38M38.28M
Operating Cash Flow38.78M58.26M52.68M59.35M41.26M
Investing Cash Flow13.19M303.47M-1.46B-506.70M-848.87M
Financing Cash Flow-52.59M-408.07M1.45B511.86M872.32M

Australian Finance Group Ltd. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2.13
Price Trends
50DMA
2.14
Negative
100DMA
1.91
Positive
200DMA
1.74
Positive
Market Momentum
MACD
>-0.01
Positive
RSI
50.22
Neutral
STOCH
64.24
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 2.13 is below the 20-day moving average (MA) of 2.14, below the 50-day MA of 2.14, and above the 200-day MA of 1.74, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 50.22 is Neutral, neither overbought nor oversold. The STOCH value of 64.24 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

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
68
Neutral
AU$333.03M26.747.94%4.53%16.16%32.97%
66
Neutral
AU$720.32M13.977.25%5.15%14.46%-6.87%
65
Neutral
AU$843.38M8.4711.75%6.37%3.70%-10.93%
63
Neutral
AU$576.74M19.3515.01%3.66%9.49%-0.36%
58
Neutral
HK$91.42B5.42-3.21%4.84%7.36%-55.21%
58
Neutral
€351.54M12.77
6.93%3.02%-41.58%
48
Neutral
AU$1.18B54.572.49%2.64%11.26%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:AFG
Australian Finance Group Ltd.
2.13
0.82
62.60%
AU:RMC
Resimac Group Limited
0.89
0.18
25.18%
AU:PPM
Pepper Money Ltd
1.90
0.65
52.00%
AU:LFS
Latitude Group Holdings Ltd.
1.14
0.02
1.79%
AU:COG
COG Financial Services Limited
1.65
0.68
70.10%
AU:MYS
Mystate Limited
4.27
0.55
14.78%

Australian Finance Group Ltd. Corporate Events

AFG Releases Q4 FY2025 Mortgage Index
Jul 13, 2025

Australian Finance Group Ltd has released its Mortgage Index for the fourth quarter of the financial year 2025. This announcement provides insights into the company’s performance in the mortgage sector, potentially impacting its market positioning and offering valuable information for stakeholders regarding trends in the mortgage industry.

The most recent analyst rating on (AU:AFG) stock is a Buy with a A$1.68 price target. To see the full list of analyst forecasts on Australian Finance Group Ltd. stock, see the AU:AFG Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 11, 2025