Australian Finance Group Ltd. (AFG) AI Stock Analysis

• Market Cap: AU$576.74M
• Dividend Yield: 3.66%
• Average Volume (3M): 438.73K
• Price to Earnings (P/E): 19.3
• Beta (1Y): 0.88
• Revenue Growth: 9.49%
• EPS Growth: -0.36%
• Country: AU
• Employees: 317
• Sector: Financial
• Sector Strength: 76
• Industry: Financial - Mortgages
• EPS (TTM): 0.06
• Shares Outstanding: 270,769,040
• 10 Day Avg. Volume: 307,164
• 30 Day Avg. Volume: 438,731
• PEG Ratio: -0.19
• Price to Book (P/B): 2.71
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.15
• 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$2.15
• Price Target Upside: 0.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 63 Neutral
• 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. Business Overview & Revenue Model

Company Description

Australian 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 Money

AFG 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

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	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	1.10B	1.02B	949.34M	761.47M	689.50M
Gross Profit	363.15M	338.54M	204.19M	161.29M	155.90M
EBITDA	291.82M	262.17M	141.19M	113.86M	106.26M
Net Income	28.98M	37.31M	38.78M	51.30M	38.08M
Balance Sheet
Total Assets	5.98B	6.32B	6.68B	4.74B	4.09B
Cash, Cash Equivalents and Short-Term Investments	67.40M	222.24M	268.58M	241.05M	161.53M
Total Debt	4.57B	4.60B	4.98B	3.46B	2.92B
Total Liabilities	5.77B	6.12B	6.47B	4.54B	3.91B
Stockholders Equity	194.42M	179.06M	184.32M	202.98M	178.21M
Cash Flow
Free Cash Flow	20.94M	51.23M	40.01M	52.38M	38.28M
Operating Cash Flow	38.78M	58.26M	52.68M	59.35M	41.26M
Investing Cash Flow	13.19M	303.47M	-1.46B	-506.70M	-848.87M
Financing Cash Flow	-52.59M	-408.07M	1.45B	511.86M	872.32M

Australian Finance Group Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.13
• 50DMA: Negative
• 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: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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
COG	68 Neutral	AU$333.03M	26.74	7.94%	4.53%	16.16%	32.97%
MYS	66 Neutral	AU$720.32M	13.97	7.25%	5.15%	14.46%	-6.87%
PPM	65 Neutral	AU$843.38M	8.47	11.75%	6.37%	3.70%	-10.93%
AFG	63 Neutral	AU$576.74M	19.35	15.01%	3.66%	9.49%	-0.36%
Sector *	58 Neutral	HK$91.42B	5.42	-3.21%	4.84%	7.36%	-55.21%
RMC	58 Neutral	€351.54M	12.77		6.93%	3.02%	-41.58%
LFS	48 Neutral	AU$1.18B	54.57	2.49%	2.64%	11.26%	―

Australian Finance Group Ltd. Corporate Events

AFG Releases Q4 FY2025 Mortgage Index

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.