Data#3 Limited. (DTL) AI Stock Analysis

• Market Cap: AU$1.15B
• Dividend Yield: 3.02%
• Average Volume (3M): 352.69K
• Price to Earnings (P/E): 15.1
• Beta (1Y): 0.69
• Revenue Growth: 5.82%
• EPS Growth: 11.11%
• Country: AU
• Employees: 1,480
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.15
• Shares Outstanding: 155,077,840
• 10 Day Avg. Volume: 271,452
• 30 Day Avg. Volume: 352,695
• PEG Ratio: 2.28
• Price to Book (P/B): 14.00
• Price to Sales (P/S): 1.38
• P/FCF Ratio: 9.50
• 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$8.40
• Price Target Upside: 13.06% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): 0.33
• Revenue Forecast (FY): AU$3.15B

• Rating: 67 Neutral
• Price Target: AU$8.00 ▲(7.67% Upside)
• Action: Downgraded Date: 02/25/26
• Date: Action: Downgraded 02/25/26

Strong financial performance (growth, profitability, and especially cash flow) supports the score, but it is meaningfully offset by weak technicals (price below all major moving averages with negative MACD). Valuation is neutral-to-slightly supportive due to the dividend yield despite a mid-to-high P/E.

Positive Factors

Exceptional cash generation

Very strong free cash flow growth gives the company durable financial flexibility: supports reinvestment, dividends, or M&A without heavy external funding. Over 2-6 months this cash convertibility reduces refinancing risk and underpins operational resilience through cycles.

Sustained revenue expansion

Consistent double-digit revenue growth signals persistent demand for its IT services and cloud solutions. That trend supports scalable service margins, recurring project pipelines and gives time to deepen customer relationships, a durable driver of top-line momentum.

Reseller + managed services model

A hybrid model combining vendor partnerships and recurring managed services diversifies revenue streams and creates sticky client engagements. Over months this mix supports predictable recurring revenue and cross-sell opportunities, strengthening long-term cash visibility.

Negative Factors

Low equity ratio

A sub-10% equity ratio means assets are largely financed by liabilities; this provides limited buffer against asset write-downs or unexpected cash-flow stress. Even with low reported leverage, the thin equity cushion raises structural downside risk under adverse scenarios.

Modest net margin

A relatively low net margin reduces the company's ability to absorb cost inflation or invest aggressively while remaining profitable. With services and resale mix, conversion from gross to net is limited, making long-term profitability sensitive to pricing and operating cost shifts.

Dependence on vendor programs

Heavy reliance on vendor partner terms and rebates creates structural margin and revenue exposure if vendors change pricing, incentives, or go-to-market priorities. Over months this reliance can produce variability and limits direct control over product economics.

Data#3 Limited. Business Overview & Revenue Model

Company Description

Data#3 Limited provides information technology solutions and services in Australia and Fiji. The company offers cloud solutions, such as public cloud and private cloud services, and modern data center solutions; modern workplace solutions, including collaboration, end user devices, systems management, and printing; and security solutions comprising cloud security, identity and access management, data security and privacy, infrastructure and end point security, and security monitoring and analytics. It also provides data and analytics solutions, such as business analytics, customer management, Internet of things (IOT), location-based analytics; and connectivity solutions consists of IT-OT networking, SD-WAN, and software-defined and wireless networks. In addition, the company offers consulting, procurement, project, managed, and resourcing services. Data#3 Limited was founded in 1977 and is headquartered in Brisbane, Australia.

How the Company Makes Money

Data#3 generates revenue primarily through the sale of IT products and services. Its key revenue streams include software licensing, where the company resells software from top vendors such as Microsoft and VMware, and managed services, which involve ongoing IT support and infrastructure management for clients. Additionally, the company earns revenue from consulting services that help organizations optimize their IT strategies and implement new technologies. Significant partnerships with major technology providers, along with a strong reputation in the market, contribute to its earnings by enabling Data#3 to offer comprehensive solutions tailored to client needs.

Data#3 Limited. Financial Statement Overview

Summary

Strong fundamentals: revenue grew 13.18% with solid margins (gross 33.94%, net 5.64%) and excellent cash generation (free cash flow growth 121.08%). Balance sheet leverage is low (debt-to-equity 0.22), though the relatively low equity ratio (8.93%) is a modest risk factor.

Income Statement

Data#3 Limited has demonstrated strong revenue growth with a 13.18% increase in the latest year, indicating robust demand for its services. The company maintains healthy profitability margins, with a gross profit margin of 33.94% and a net profit margin of 5.64% in the latest period. The EBIT and EBITDA margins are also solid, reflecting efficient operational management. Overall, the income statement shows a positive growth trajectory and stable profitability.

Balance Sheet

The balance sheet of Data#3 Limited reflects a stable financial position with a manageable debt-to-equity ratio of 0.22, indicating low leverage. The return on equity is impressive at 57.24%, showcasing effective use of shareholder funds. The equity ratio stands at 8.93%, suggesting a conservative capital structure. The company appears financially stable with a strong equity base, although the relatively low equity ratio could be a potential risk if asset values fluctuate.

Cash Flow

Data#3 Limited exhibits exceptional cash flow performance, with a significant free cash flow growth rate of 121.08%, indicating strong cash generation capabilities. The operating cash flow to net income ratio is robust, suggesting efficient conversion of earnings into cash. The free cash flow to net income ratio is also favorable, highlighting the company's ability to generate cash relative to its net income. Overall, the cash flow statement reflects excellent liquidity and cash management.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	884.41M	852.66M	805.75M	808.63M	2.19B	1.96B
Gross Profit	283.25M	289.38M	270.60M	244.37M	218.22M	194.75M
EBITDA	71.64M	75.64M	69.16M	60.45M	50.38M	43.20M
Net Income	49.02M	48.19M	43.31M	37.03M	30.26M	25.41M
Balance Sheet
Total Assets	426.91M	942.10M	866.15M	944.48M	780.16M	704.13M
Cash, Cash Equivalents and Short-Term Investments	125.41M	356.69M	276.38M	404.77M	149.46M	204.32M
Total Debt	22.39M	18.55M	20.59M	23.88M	25.64M	26.87M
Total Liabilities	342.55M	857.93M	791.23M	876.14M	718.46M	647.83M
Stockholders Equity	84.36M	84.17M	74.92M	68.34M	61.70M	56.30M
Cash Flow
Free Cash Flow	44.86M	124.13M	-86.80M	290.04M	-26.50M	-24.61M
Operating Cash Flow	45.79M	126.29M	-86.19M	291.02M	-22.62M	-22.69M
Investing Cash Flow	-2.81M	-2.17M	-605.00K	-968.00K	-3.88M	-2.07M
Financing Cash Flow	-47.64M	-44.19M	-41.40M	-34.97M	-28.58M	-25.21M

Data#3 Limited. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.43
• 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:DTL, the sentiment is Negative. The current price of 7.43 is below the 20-day moving average (MA) of 7.92, below the 50-day MA of 8.87, and below the 200-day MA of 8.52, indicating a bearish trend. The MACD of -0.60 indicates Positive momentum. The RSI at 39.92 is Neutral, neither overbought nor oversold. The STOCH value of 70.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:DTL.

Data#3 Limited. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DTL	67 Neutral	AU$1.15B	15.07	58.17%	3.02%	5.82%	11.11%
COS	67 Neutral	AU$40.95M	-77.51	10.79%	4.66%	14.59%	-11.13%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
APX	61 Neutral	AU$454.29M	-6.25	-22.95%	―	-9.02%	80.67%
ATA	60 Neutral	AU$206.53M	-16.19	0.40%	―	23.53%	-23.98%
KYP	56 Neutral	AU$76.58M	38.88	5.67%	―	11.90%	42.11%
DUG	46 Neutral	AU$275.05M	31.82	-10.10%	―	-3.10%	-236.41%

Data#3 Limited. Corporate Events

Data#3 Declares Interim Dividend of 13.5 Cents per Share

Data#3 Limited has declared an interim dividend of AUD 0.135 per ordinary fully paid share for the six-month period ended 31 December 2025. The company continues its practice of returning cash to shareholders on a regular basis, signalling ongoing profitability and a stable capital management approach.

The dividend will be paid on 31 March 2026, with an ex‑dividend date of 16 March 2026 and a record date of 17 March 2026. The announcement provides clarity on the company’s near-term cash returns, giving income-focused investors a defined timetable for when the distribution will be received.

The most recent analyst rating on (AU:DTL) stock is a Buy with a A$11.00 price target. To see the full list of analyst forecasts on Data#3 Limited. stock, see the AU:DTL Stock Forecast page.

Data#3 lifts profit and dividend as infrastructure and software sales surge

Data#3 Limited reported first-half FY26 gross sales up 9.2% to $1.5 billion and statutory revenue up 8.1% to $423.1 million, outpacing the broader Australian IT market. Net profit after tax rose 3.7% to $23.2 million, with earnings per share up 3.6% and the interim fully franked dividend lifted 3.1% to 13.50 cents, supported by a strong balance sheet with no borrowings.

The result was driven by record software gross sales of $1.1 billion, strong demand for security and cloud subscriptions, and nearly 18% growth in infrastructure solutions, including more than 30% growth in end-user devices and robust data centre sales. While managed services benefited from major contract renewals and wins, project services and recruitment lagged in tougher conditions, and management highlighted AI and Windows 11 refresh-driven infrastructure demand as key tailwinds for continued growth in FY26.

The most recent analyst rating on (AU:DTL) stock is a Buy with a A$11.00 price target. To see the full list of analyst forecasts on Data#3 Limited. stock, see the AU:DTL Stock Forecast page.

Data#3 lifts first-half profit, sales and dividend on steady growth

Data#3 Limited reported a solid first-half performance for the six months to 31 December 2025, with revenue from ordinary activities rising 7.9% to $429.4 million and net profit after tax attributable to members up 3.7% to $23.2 million. The company also highlighted a 9.1% increase in non-IFRS gross sales and other revenue to $1.55 billion, lifted its fully franked interim dividend to 13.5 cents per share, and improved net tangible assets per share to $0.46, signalling steady operational growth and returning more cash to shareholders.

The most recent analyst rating on (AU:DTL) stock is a Buy with a A$11.00 price target. To see the full list of analyst forecasts on Data#3 Limited. stock, see the AU:DTL Stock Forecast page.

Data#3 Sets Date for 1H FY26 Results and Investor Briefing

Data#3 Limited has scheduled the release of its detailed first-half FY26 financial results for Monday, 23 February 2026, and will hold a market briefing the same morning led by CEO and managing director Brad Colledge and CFO Cherie O’Riordan. The results, along with a presentation, will be lodged with the ASX and made available on the company’s website, with a live and archived webcast of the briefing accessible to investors and other stakeholders, underscoring the company’s focus on transparent communication with the market ahead of what may be a key indicator of its ongoing performance in the competitive Australian IT services sector.

The most recent analyst rating on (AU:DTL) stock is a Buy with a A$11.00 price target. To see the full list of analyst forecasts on Data#3 Limited. stock, see the AU:DTL Stock Forecast page.

Data#3 Announces Lapse of 49,961 Performance Rights

Data#3 Limited has announced the lapse of 49,961 performance rights (ASX code DTLAA), which ceased on 23 December 2025 after the conditional rights failed to meet, or became incapable of meeting, their vesting conditions. The cessation reduces the pool of potential equity-based remuneration and may marginally affect the company’s future share capital structure, signalling that certain performance hurdles tied to these rights were not achieved during the relevant period.

The most recent analyst rating on (AU:DTL) stock is a Buy with a A$10.00 price target. To see the full list of analyst forecasts on Data#3 Limited. stock, see the AU:DTL Stock Forecast page.

Data#3 Updates Director Bradley Colledge’s Equity Interests Under Long-Term Incentive Plan

Data#3 Limited has reported a change in the interests of director Bradley Dean Colledge under its Long Term Incentive Plan, following the issue of 39,314 unquoted performance rights at no cost. After this change, Colledge holds a direct interest in 274,019 shares and 39,314 performance rights, as well as an indirect interest in 177,520 shares and 65,238 performance rights, reflecting ongoing alignment of executive remuneration with shareholder-approved incentive structures rather than any on-market trading activity.

The most recent analyst rating on (AU:DTL) stock is a Buy with a A$10.00 price target. To see the full list of analyst forecasts on Data#3 Limited. stock, see the AU:DTL Stock Forecast page.

Data#3 Issues 161,744 Unquoted Performance Rights Under Employee Incentive Scheme

Data#3 Limited has notified the market of the issue of 161,744 new unquoted performance rights under its employee incentive scheme. The performance rights, which are not intended to be quoted on the ASX and were issued on 15 December 2025, form part of the company’s ongoing strategy to align staff incentives with long-term shareholder value, signalling continued focus on talent retention and performance-based remuneration.

The most recent analyst rating on (AU:DTL) stock is a Buy with a A$10.00 price target. To see the full list of analyst forecasts on Data#3 Limited. stock, see the AU:DTL Stock Forecast page.