Australian Finance Group Ltd. (AFG) AI Stock Analysis

• Market Cap: AU$557.11M
• Dividend Yield: 4.21%
• Average Volume (3M): 750.83K
• Price to Earnings (P/E): 15.9
• Beta (1Y): 0.94
• Revenue Growth: 14.37%
• EPS Growth: 20.75%
• Country: AU
• Employees: 317
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Mortgages
• EPS (TTM): 0.07
• Shares Outstanding: 271,760,070
• 10 Day Avg. Volume: 626,907
• 30 Day Avg. Volume: 750,829
• PEG Ratio: 0.97
• Price to Book (P/B): 2.79
• Price to Sales (P/S): 1.54
• P/FCF Ratio: 20.60
• 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$3.03
• Price Target Upside: 41.59% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: AU$2.00 ▼(-6.54% Downside)

The overall score reflects significant financial challenges, including declining revenue and high leverage, which weigh heavily on the stock's outlook. Technical indicators suggest a lack of bullish momentum, while valuation metrics provide some support with a moderate P/E ratio and a decent dividend yield.

Positive Factors

Recurring Revenue Model

AFG's aggregator model and broad broker network produce recurring, fee-based revenue via upfront and ongoing trail commissions. This structural distribution advantage yields predictable cash flow over loan life, supports long-term relationships and reduces dependence on one-off origination spikes.

Operational Profitability

Positive EBIT and EBITDA margins indicate core platform and distribution operations remain profitable despite volume shocks. Sustained operating profitability provides capacity to fund compliance, tech and broker support, helping protect market position and enabling recovery over the medium term.

Cash Generation Ability

A free cash flow to net income ratio near 0.84 shows AFG converts most reported earnings into cash. That cash generation capacity supports debt servicing, continued platform investment and potential shareholder returns, providing a buffer during extended housing or origination downturns.

Negative Factors

High Leverage

A debt-to-equity ratio of 25.29 reflects materially elevated leverage, constraining financial flexibility. High debt amplifies interest and refinancing risk, limits strategic investments or bolt-on M&A, and increases vulnerability to interest-rate moves or weaker cash flows over the medium term.

Severe Revenue Decline

A -65% revenue drop drastically reduces commission pools and the size of recurring trail income, eroding the core fee base. Such a material contraction impairs reinvestment capacity, pressures margins and could take multiple housing cycles to rebuild, weakening medium-term growth prospects.

Weak Cash Conversion

Low operating cash flow conversion means reported profits are not reliably turning into cash available for operations or debt reduction. Persistent weak conversion increases liquidity risk, may force external financing or cuts to broker support, and hinders sustainable deleveraging over months.

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 generates revenue primarily through commissions and fees earned from lenders for services provided by its network of mortgage brokers. The company receives upfront commissions when brokers facilitate loans and ongoing trail commissions for the duration of the loan. Additionally, AFG earns income from its financial planning and insurance services, as well as from its proprietary technology platform that supports brokers in their operations. Significant partnerships with various financial institutions also contribute to AFG's earnings, as these relationships enhance the range of products and services available to clients, thereby increasing transaction volumes.

Australian Finance Group Ltd. Financial Statement Overview

Summary

Australian Finance Group Ltd. faces challenges with declining revenue and profitability, coupled with high leverage. While operational efficiency is present, the company must address its financial risks and improve cash conversion to enhance financial stability.

Income Statement

The income statement shows a significant decline in revenue growth, with a negative growth rate of -65.22% in the latest period. Gross profit margin and net profit margin have also decreased compared to previous years, indicating reduced profitability. However, the company maintains a positive EBIT and EBITDA margin, suggesting some operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 25.29, indicating significant leverage and potential financial risk. The equity ratio is low, reflecting limited equity financing. These factors suggest a need for careful management of financial obligations.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth, but the company maintains a positive free cash flow to net income ratio of 0.84, indicating some ability to generate cash relative to net income. The operating cash flow to net income ratio is low, suggesting challenges in converting income into cash.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.24B	403.90M	1.10B	1.02B	949.34M	761.47M
Gross Profit	810.70M	116.40M	363.15M	338.54M	204.19M	161.29M
EBITDA	59.20M	59.20M	291.82M	262.17M	141.19M	113.86M
Net Income	35.00M	35.00M	28.98M	37.31M	38.78M	51.30M
Balance Sheet
Total Assets	7.07B	7.07B	5.98B	6.32B	6.68B	4.74B
Cash, Cash Equivalents and Short-Term Investments	223.80M	223.80M	67.40M	222.24M	268.58M	241.05M
Total Debt	5.62B	5.62B	4.57B	4.60B	4.98B	3.46B
Total Liabilities	6.85B	6.85B	5.77B	6.12B	6.47B	4.54B
Stockholders Equity	222.10M	222.10M	194.42M	179.06M	184.32M	202.98M
Cash Flow
Free Cash Flow	38.70M	30.10M	20.94M	51.23M	40.01M	52.38M
Operating Cash Flow	39.80M	35.90M	38.78M	58.26M	52.68M	59.35M
Investing Cash Flow	-1.06B	-1.05B	13.19M	303.47M	-1.46B	-506.70M
Financing Cash Flow	1.02B	1.02B	-52.59M	-408.07M	1.45B	511.86M

Australian Finance Group Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.14
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 2.14 is above the 20-day moving average (MA) of 2.13, below the 50-day MA of 2.20, and below the 200-day MA of 2.25, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 41.57 is Neutral, neither overbought nor oversold. The STOCH value of 41.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
PPM	56 Neutral	AU$809.02M	8.67	12.11%	11.71%	-6.49%	-5.40%
COG	54 Neutral	AU$388.76M	17.96	12.36%	2.86%	-26.30%	40.12%
MYS	53 Neutral	AU$785.65M	17.61	5.92%	4.63%	26.01%	-17.55%
AFG	52 Neutral	AU$557.11M	15.87	16.81%	4.21%	14.37%	20.75%
LFS	46 Neutral	AU$1.01B	17.58	5.01%	6.60%	14.81%	―

Australian Finance Group Ltd. Corporate Events

Australian Finance Group Sets Date for HY2026 Results and Investor Call

Australian Finance Group Ltd has announced it will release its half-year 2026 financial results on Wednesday, 18 February 2026. The company’s CEO David Bailey and CFO Luca Pietropiccolo will host a conference call and presentation for analysts and investors at 11:00am AEDT on the same day, underscoring AFG’s ongoing engagement with the investment community and providing a formal forum for stakeholders to receive and question the latest financial and operational performance update.

The most recent analyst rating on (AU:AFG) stock is a Hold with a A$2.00 price target. To see the full list of analyst forecasts on Australian Finance Group Ltd. stock, see the AU:AFG Stock Forecast page.

AFG Releases Q2 FY2026 Mortgage Index Update

Australian Finance Group Ltd has released its AFG Mortgage Index for the second quarter of the 2026 financial year, providing an update on mortgage activity and trends within its network. The publication of this index offers stakeholders insight into housing finance dynamics and AFG’s role in the mortgage market, although specific operational or financial metrics for the quarter were not disclosed in the announcement.

The most recent analyst rating on (AU:AFG) stock is a Hold with a A$2.00 price target. To see the full list of analyst forecasts on Australian Finance Group Ltd. stock, see the AU:AFG Stock Forecast page.