tiprankstipranks
Trending News
More News >
Kip McGrath Education Centres Limited (AU:KME)
ASX:KME
Australian Market

Kip McGrath Education Centres Limited (KME) AI Stock Analysis

Compare
4 Followers

Top Page

AU:KME

Kip McGrath Education Centres Limited

(Sydney:KME)

Select Model
Select Model
Select Model
Neutral 48 (OpenAI - 5.2)
Rating:48Neutral
Price Target:
AU$0.49
▼(-19.17% Downside)
Action:ReiteratedDate:11/18/25
The overall stock score of 48 reflects significant profitability challenges and bearish technical indicators. While the company has strong cash flow management and a conservative balance sheet, these strengths are overshadowed by negative net profit margins and a negative P/E ratio. The technical analysis suggests a bearish trend, further impacting the score.
Positive Factors
Franchise-based business model
Kip McGrath's franchising model creates a scalable, low-capex growth engine: fees and royalties provide recurring revenue while corporate support and licensed curriculum centralize product development. Over months this structure supports margin resilience and faster roll-out without heavy corporate investment.
Strong free cash flow trends
Nearly 30% FCF growth and healthy operating-cash-to-net-income conversion indicate durable cash generation. Reliable free cash flow enables reinvestment in curriculum, franchisee support and working capital, helping the company endure operating losses while funding strategic initiatives over the medium term.
Conservative leverage
A low debt-to-equity ratio signals limited financial risk and greater flexibility to support franchisees, invest in product development or absorb cyclical weakness. Conservative leverage is a durable strength that preserves optionality for capex, marketing or balance sheet support during multi-quarter recovery efforts.
Negative Factors
Negative net profitability
A sustained negative net margin near -17% shows the company fails to convert operational results into bottom-line profit. Over months this erodes retained earnings and constrains the firm's ability to fund growth or support franchisees without drawing on cash or raising capital, weakening long-term resilience.
Declining revenue trends
Revenues falling by about 4% highlights demand or enrolment pressure that reduces royalty and tuition bases. Top-line contraction undermines operating leverage and makes margin recovery harder; without reversing revenue declines, profit restoration and franchise expansion are structurally constrained over the next several quarters.
Very weak return on equity
A ROE of -28.5% indicates shareholder capital is losing value and management is not generating acceptable returns. Persistently negative ROE impairs investor confidence and can limit access to external financing or increase its cost, reducing strategic flexibility during multi-quarter recovery periods.

Kip McGrath Education Centres Limited (KME) vs. iShares MSCI Australia ETF (EWA)

Kip McGrath Education Centres Limited Business Overview & Revenue Model

Company DescriptionKip McGrath Education Centres Limited offers English and Maths education services in Australia, New Zealand, the United Kingdom, and internationally. The company also provides tutorial assistance in English and Maths to primary and secondary students; and online tutoring services. It also has a franchise network. The company operates a network of approximately 560 tutoring centers. Kip McGrath Education Centres Limited was founded in 1976 and is headquartered in Newcastle, Australia.
How the Company Makes MoneyKip McGrath Education Centres Limited generates revenue primarily through its franchise model. The company earns money by charging franchise fees to new franchisees, which typically includes an upfront investment as well as ongoing royalties based on a percentage of the franchisee's gross revenue. Additionally, KME earns income from the sale of educational resources and materials used in its tutoring programs. Significant partnerships with educational institutions and organizations also contribute to its revenue by enhancing brand visibility and credibility, allowing for broader student enrollment across its centers. Furthermore, KME's expansion into online tutoring services has opened new avenues for revenue, catering to a growing demand for digital learning solutions.

Kip McGrath Education Centres Limited Financial Statement Overview

Summary
Kip McGrath Education Centres Limited exhibits strong cash flow management and a conservative balance sheet with low leverage. However, the company faces profitability challenges, as evidenced by negative net profit margins and return on equity. While operational efficiency is present, translating it into net profitability remains a key challenge.
Income Statement
45
Neutral
The company has shown inconsistent revenue growth with a recent decline of 3.97%. Gross profit margins have improved significantly to 55.3%, but net profit margin is negative at -16.9%, indicating profitability challenges. EBIT and EBITDA margins are moderate, suggesting operational efficiency but not translating into net profitability.
Balance Sheet
60
Neutral
The company maintains a low debt-to-equity ratio of 0.17, indicating conservative leverage. However, the negative return on equity of -28.5% reflects poor profitability relative to shareholder investments. The equity ratio is stable, suggesting a solid asset base supported by equity.
Cash Flow
70
Positive
Free cash flow has grown by 29.6%, showing strong cash generation capabilities. The operating cash flow to net income ratio is healthy at 0.72, indicating good cash conversion. However, the free cash flow to net income ratio is slightly below 1, suggesting that not all net income is being converted into free cash flow.
BreakdownTTMJun 2025Jun 2024Jun 2023Jun 2022Jun 2021
Income Statement
Total Revenue31.29M31.41M28.85M26.65M24.63M19.24M
Gross Profit14.11M17.37M10.63M10.18M9.67M8.09M
EBITDA8.86M3.82M6.99M6.71M6.21M5.12M
Net Income-4.17M-5.32M1.32M1.92M1.88M1.73M
Balance Sheet
Total Assets29.00M30.47M34.88M37.11M36.38M30.73M
Cash, Cash Equivalents and Short-Term Investments8.19M6.93M5.40M9.15M7.63M10.57M
Total Debt3.78M3.11M3.69M3.63M3.15M2.21M
Total Liabilities9.95M11.84M11.18M14.03M14.45M12.27M
Stockholders Equity19.05M18.64M23.70M23.08M21.92M18.46M
Cash Flow
Free Cash Flow6.63M5.93M-1.57M2.81M277.00K1.37M
Operating Cash Flow6.82M6.26M2.86M6.37M5.05M6.16M
Investing Cash Flow-1.57M-1.96M-4.44M-3.57M-6.96M-4.79M
Financing Cash Flow-2.63M-2.77M-2.18M-1.28M-1.04M-2.63M

Kip McGrath Education Centres Limited Technical Analysis

Technical Analysis Sentiment
Negative
Last Price0.60
Price Trends
50DMA
0.57
Negative
100DMA
0.57
Negative
200DMA
0.55
Negative
Market Momentum
MACD
>-0.01
Negative
RSI
48.46
Neutral
STOCH
81.48
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:KME, the sentiment is Negative. The current price of 0.6 is above the 20-day moving average (MA) of 0.53, above the 50-day MA of 0.57, and above the 200-day MA of 0.55, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 48.46 is Neutral, neither overbought nor oversold. The STOCH value of 81.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:KME.

Kip McGrath Education Centres Limited Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
AU$79.34M8.0960.13%1.17%120.57%
62
Neutral
$20.33B14.63-3.31%3.23%1.93%-12.26%
53
Neutral
AU$122.81M119.490.15%-1.08%
48
Neutral
AU$30.21M4.7010.80%1.67%-2.81%-503.02%
45
Neutral
AU$41.16M-25.24-53.18%-13.91%53.37%
45
Neutral
AU$14.59M-4.84-7.51%1.42%86.97%
38
Underperform
AU$17.66M-2.37-126.76%-14.55%70.98%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:KME
Kip McGrath Education Centres Limited
0.58
0.11
25.00%
AU:EDU
EDU Holdings Limited
0.69
0.53
345.16%
AU:NXD
iCollege Ltd.
0.17
0.00
0.00%
AU:AKG
Academies Australasia Group Limited
0.11
<0.01
10.00%
AU:CLU
Cluey Ltd
0.05
-0.04
-46.51%
AU:3PL
3P Learning Ltd.
0.49
-0.17
-25.76%

Kip McGrath Education Centres Limited Corporate Events

Kip McGrath Lifts Profit and Dividend as New CEO Resets Franchise Strategy
Feb 25, 2026

Kip McGrath Education Centres reported half-year revenue of $15.2 million, up 1.6%, with net profit after tax from continuing operations rising 15.4% to $1.5 million, supported by cost savings and operational efficiencies. Despite a 5% decline in total lesson numbers and a reduction in centres from 453 to 437, higher average lesson prices, increased lessons per centre, a higher franchise fee rate, a share buyback, and a lifted dividend underscored an emphasis on profitability and capital returns.

The period marked the first results under new CEO Melinda Smith, who has led a review and reset focused on franchisee engagement and operational improvement. Insights from a comprehensive franchisee survey are guiding efforts to enhance customer service, marketing, lead generation and business systems, as the company accelerates the transition to its higher-fee gold franchise model and prioritises supporting franchisees to grow lesson numbers and drive sustainable long-term growth.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Declares Interim A$0.01 Dividend for Half-Year to June 2026
Feb 25, 2026

Kip McGrath Education Centres Limited has declared an ordinary dividend of A$0.01 per fully paid share, relating to a six‑month period ending 30 June 2026. The dividend will trade ex‑dividend on 11 March 2026, with a record date of 12 March and payment scheduled for 26 March, signalling continued cash returns to shareholders and confidence in the company’s financial position.

The distribution timetable gives investors clarity on entitlement and cash flow planning, and reinforces Kip McGrath’s commitment to regular shareholder distributions. This announcement may support the company’s market positioning as a stable, income‑paying education provider, potentially enhancing its appeal to income‑focused investors in the listed education sector.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Lifts Half-Year Profit and Increases Interim Dividend
Feb 25, 2026

Kip McGrath Education Centres Limited reported half-year revenue from continuing operations of $15.2 million, up 1.6%, with EBITDA rising 3.9% to $4.3 million and profit after tax from continuing operations up 15.4% to $1.5 million. Overall profit attributable to shareholders surged to $1.76 million from $616,000, aided by a turnaround in discontinued operations and an increase in net tangible assets per share from 3.37 to 5.39 cents.

The board paid a fully franked final dividend of 0.5 cents per share for FY25 and has declared a fully franked interim dividend of 1.0 cent per share for FY26, estimated at $554,000, signaling confidence in the company’s cash generation. While a dividend reinvestment plan remains in place, the board has suspended its operation for the FY26 interim dividend, meaning shareholders will receive this payout entirely in cash rather than additional shares.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Cancels 315,826 Shares Following On‑Market Buy-Back
Jan 12, 2026

Kip McGrath Education Centres Limited has cancelled 315,826 ordinary fully paid shares as part of an on‑market buy-back completed on 31 December 2025. The reduction in issued capital is likely to marginally enhance earnings per share and may signal management’s confidence in the company’s financial position, with potential implications for shareholder value and capital management strategy.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Announces Change of Company Secretary
Jan 7, 2026

Kip McGrath Education Centres Limited has announced a change in its company secretary role, with Brett Edwards resigning and Adrian Sturrock being appointed as company secretary, both effective from 17 December 2025. The board-approved transition reflects routine corporate governance changes and signals continuity in the company’s administrative and compliance functions, with no indication of broader strategic or operational shifts for shareholders or other stakeholders.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Continues On-Market Share Buy-Back With Daily Purchases
Jan 1, 2026

Kip McGrath Education Centres Limited has reported an update on its ongoing on-market share buy-back program for its ordinary fully paid shares listed on the ASX under the code KME. As of 2 January 2026, the company disclosed that it had repurchased a cumulative total of 1,417,176 shares prior to the previous trading day and a further 53,894 shares on the previous day, as part of a buy-back that was initially notified in August 2025 and most recently updated on 31 December 2025. The continuing daily buy-back activity signals management’s commitment to returning capital to shareholders and may support the company’s share price and earnings per share metrics, with implications for existing investors through a reduced share float and potentially improved capital management profile.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Continues On-Market Share Buy-Back With Latest Daily Update
Dec 30, 2025

Kip McGrath Education Centres Limited has provided an updated notification to the ASX on its ongoing on-market share buy-back program for its ordinary fully paid shares. As of 31 December 2025, the company reported that a total of 1,349,950 shares had been repurchased prior to the previous trading day, with a further 67,226 shares bought back on the previous day, reflecting the continued execution of the capital management initiative first notified in August 2025 and updated daily. The ongoing buy-back signals management’s commitment to returning capital to shareholders and may indicate confidence in the company’s valuation, potentially improving earnings per share and supporting the share price over time.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Continues On-Market Share Buy-Back Programme
Dec 29, 2025

Kip McGrath Education Centres Limited has continued its on-market share buy-back program, reporting that it repurchased 66,666 ordinary fully paid shares on the previous trading day, bringing the total bought back so far to 1,283,284 shares. The ongoing daily buy-back notifications signal active capital management by the company, which may support earnings per share and indicate confidence in its valuation, with implications for existing shareholders through a reduced share base and potentially improved shareholder returns over time.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Updates Market on Progress of On-Market Share Buy-Back
Dec 28, 2025

Kip McGrath Education Centres Limited has provided an updated daily notification on its on-market share buy-back program for its ordinary fully paid shares traded under the ASX code KME. As of 29 December 2025, the company reported that it had repurchased a total of 1,221,718 shares prior to the previous trading day, and a further 61,566 shares on the previous day, as part of the ongoing buy-back first notified in August 2025. The continued execution of the buy-back signals management’s ongoing capital management strategy and may be interpreted as an indication of confidence in the company’s valuation, with potential implications for earnings per share and shareholder value over time.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Continues On‑Market Share Buy-Back with Latest Daily Update
Dec 22, 2025

Kip McGrath Education Centres Limited has updated the market on its ongoing on‑market share buy-back programme for its ordinary fully paid shares, reporting that a total of 1,155,244 shares had been repurchased before the previous trading day, with a further 66,474 shares bought back on the previous day. The continued execution of the buy-back, initially notified in August 2025 and now reported in this latest daily update, signals management’s ongoing capital management strategy and may be interpreted as a sign of confidence in the company’s valuation, with potential implications for earnings per share and the ownership structure of existing shareholders.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Cancels 293,271 Shares Following On‑Market Buy-Back
Dec 19, 2025

Kip McGrath Education Centres Limited has cancelled 293,271 ordinary fully paid shares following an on‑market share buy-back completed on 18 December 2025. The reduction in issued capital signals the company’s ongoing capital management initiatives, which may enhance earnings per share and potentially support shareholder value by consolidating the equity base.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Updates Buy-Back Figures
Dec 17, 2025

Kip McGrath Education Centres Limited announced a correction to their previous buy-back notification. The company has bought back a total of 1,135,485 securities, with an additional 19,759 securities bought back on the previous day. This update clarifies the figures reported in the earlier announcement, reflecting the company’s ongoing efforts to manage its share capital effectively.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Education Centres Updates on Share Buy-Back Program
Dec 16, 2025

Kip McGrath Education Centres Limited has announced a daily update on its ongoing on-market buy-back program, reporting the repurchase of 19,759 ordinary fully paid securities on the previous day. This buy-back initiative, which began on August 26, 2025, reflects the company’s strategy to manage its capital structure and potentially enhance shareholder value.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Updates on Securities Buy-Back Progress
Dec 14, 2025

Kip McGrath Education Centres Limited has announced an update regarding its ongoing on-market buy-back of ordinary fully paid securities. As of the latest notification, the company has repurchased a total of 1,135,485 securities, with 33,334 bought back on the previous day. This buy-back initiative is part of the company’s strategy to manage its capital structure and potentially enhance shareholder value.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Director Increases Stake in Company
Dec 12, 2025

Kip McGrath Education Centres Limited announced a change in the director’s interest, with Damian Banks acquiring an additional 100,000 indirect shares through an on-market trade, bringing his total to 1,500,000 indirect shares. This change reflects a strategic move by the director to increase his stake in the company, potentially signaling confidence in the company’s future performance and stability, which may have implications for investors and stakeholders.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Education Centres Continues Securities Buy-Back Program
Dec 11, 2025

Kip McGrath Education Centres Limited has announced a daily buy-back of its ordinary fully paid securities, with a total of 67,445 securities bought back on the previous day. This move is part of an ongoing buy-back program, which reflects the company’s strategy to manage its capital structure and potentially enhance shareholder value.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Education Centres Continues Share Buy-Back Program
Dec 9, 2025

Kip McGrath Education Centres Limited has announced a daily update on its ongoing buy-back program, where it repurchased 71,125 ordinary fully paid securities on the previous day. This buy-back initiative reflects the company’s strategy to manage its capital structure and potentially enhance shareholder value.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Education Centres Updates Share Buy-Back Progress
Dec 8, 2025

Kip McGrath Education Centres Limited has announced an update on its ongoing share buy-back program, reporting the acquisition of 24,175 ordinary fully paid securities on the previous day. This buy-back initiative is part of the company’s strategy to manage its capital structure and potentially enhance shareholder value.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Issues Performance Rights to Employees
Dec 4, 2025

Kip McGrath Education Centres Limited announced the issuance of 140,000 performance rights under an employee incentive scheme. These unquoted securities are subject to transfer restrictions and are not listed on the ASX until the restrictions are lifted, which could impact employee retention and motivation strategies.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Director Increases Stake, Signaling Confidence
Nov 28, 2025

Kip McGrath Education Centres Limited announced a change in the director’s interest, with Damian Banks increasing his indirect holdings by acquiring 200,000 additional securities through an on-market trade. This change reflects a growing confidence in the company’s prospects, potentially impacting stakeholder perceptions and market positioning.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Kip McGrath Education Centres Appoints New Director
Nov 28, 2025

Kip McGrath Education Centres Limited has announced the appointment of Anne Bell as a director, effective from November 25, 2025. This appointment is part of the company’s ongoing efforts to strengthen its leadership team, although Anne Bell currently holds no relevant interests in securities or contracts related to the company.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME Stock Forecast page.

Director Resignation at Kip McGrath Education Centres
Nov 28, 2025

Kip McGrath Education Centres Limited announced the resignation of Ian Houston Campbell from his position as a director, effective November 25, 2025. This change in leadership may impact the company’s strategic direction and stakeholder relations, as Campbell held indirect interests in 600,000 securities through HSBC Custody Nominees on behalf of Hetale Pty Limited ATF Eagle’s Nest Retirement Fund.

The most recent analyst rating on (AU:KME) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Kip McGrath Education Centres Limited stock, see the AU:KME 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: Nov 18, 2025