Latitude Group Holdings Ltd. (LFS) AI Stock Analysis

• Market Cap: AU$977.35M
• Dividend Yield: 6.6%
• Average Volume (3M): 100.36K
• Price to Earnings (P/E): 10.4
• Beta (1Y): <0.01
• Revenue Growth: 14.81%
• EPS Growth: N/A
• Country: AU
• Employees: 742
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 0.05
• Shares Outstanding: 1,039,732,900
• 10 Day Avg. Volume: 21,108
• 30 Day Avg. Volume: 100,356
• PEG Ratio: 0.03
• Price to Book (P/B): 0.89
• Price to Sales (P/S): 0.89
• P/FCF Ratio: -3.33
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.13
• Revenue Forecast (FY): AU$904.24M

• Rating: 52 Neutral
• Price Target: AU$0.95 ▼(-10.47% Downside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is held back primarily by elevated balance-sheet leverage and weak/negative cash generation despite an earnings recovery. Technicals are also below key longer-term moving averages with negative MACD. Valuation is a positive offset due to a low P/E and a very high reported dividend yield, though cash-flow weakness tempers confidence in yield sustainability.

Positive Factors

Profitability Recovery

2025’s sharp revenue and earnings recovery reflects meaningful improvement in core lending operations and underwriting outcomes. Sustained higher earnings would generate internal capital to fund growth, support merchant programs and steadily rebuild buffers versus relying on external financing.

Merchant-anchored Origination

Latitude’s point-of-sale and merchant-distribution model embeds finance at checkout, providing durable customer acquisition, consistent deal flow and cross-sell potential. Structural merchant partnerships reduce customer acquisition cost and support recurring receivables over the medium term.

Improved Return on Equity

A rising ROE from 2025 profitability indicates the business is converting earnings into shareholder returns and gradually rebuilding capital. Higher retained earnings, if sustained, improve loss-absorbing capacity and give management more flexibility on dividends or reinvestment.

Negative Factors

Very High Leverage

Extremely elevated leverage materially constrains strategic flexibility and increases refinancing and liquidity risk. In a credit-sensitive business, high debt amplifies earnings volatility from loan losses and leaves limited buffer for executing growth or withstanding adverse macro shocks.

Weak Cash Generation

Consecutive years of negative operating and free cash flow undermine the company’s ability to self-fund lending growth and sustain distributions. Persistent cash deficits increase dependence on external funding and raise the probability of liquidity stress if credit markets tighten.

Volatile Revenue Profile

Material swings in revenue across cycles highlight sensitivity to consumer demand and origination volumes. For a debt-intensive lender, unpredictable top-line trends complicate capital planning, stress-test outcomes and make sustainable margin and cash-flow forecasting more difficult.

Latitude Group Holdings Ltd. Business Overview & Revenue Model

Company Description

Latitude Group Holdings Limited operates in instalments and lending business in Australia and New Zealand. It provides various installment products to support customers, the merchants, and other commercial partners. The company also offers lending products comprising credit cards, personal loans, and motor loans through commercial partners, as well as various channels, such as direct, online, and by phone. In addition, it provides debt consolidation, home renovation, and travel loans, as well as insurance services. The company was incorporated in 2015 and is based in Docklands, Australia. Latitude Group Holdings Limited operates as a subsidiary of KVD Singapore Pte. Ltd.

How the Company Makes Money

Latitude Group Holdings generates revenue primarily through the interest and fees associated with its lending products. The company earns income from the interest charged on personal loans and credit products, which is a significant part of its revenue model. Additionally, Latitude Group earns fees from merchants for retail finance solutions, where it facilitates point-of-sale financing options for customers. The company has established partnerships with various retailers and service providers to expand its reach and increase transaction volumes. Furthermore, Latitude Group may also generate revenue through ancillary services related to its financial products, such as insurance offerings and account management fees, contributing to its overall earnings.

Latitude Group Holdings Ltd. Financial Statement Overview

Summary

Earnings improved materially in 2025 (net income $94.0M vs $21.6M in 2024) and revenue surged (+130% YoY), but the overall financial profile is constrained by very high leverage (debt ~$6.63B vs equity ~$1.22B; ~5.45x) and two consecutive years of negative operating and free cash flow (2025 OCF -$318.1M; FCF -$325.1M).

Income Statement

Profitability improved materially in 2025, with net income rising to $94.0M from $21.6M in 2024 and a return to positive results after the 2023 loss. Reported 2025 revenue jumped sharply (+130% YoY), supporting stronger earnings. However, the longer-term revenue path is volatile (notably a steep decline in 2023 and mixed growth in prior years), and net margins remain modest in the context of a credit-services model.

Balance Sheet

Leverage is the key constraint: total debt is high at ~$6.63B versus equity of ~$1.22B in 2025, implying a very elevated debt-to-equity level (~5.45x) that has remained high across the period. While equity is relatively stable and 2025 profitability helped lift returns on equity to ~7.7%, the balance sheet profile leaves less flexibility if credit conditions tighten or earnings become more volatile.

Cash Flow

Cash generation is inconsistent and recently weak: 2025 operating cash flow was negative (-$318.1M) and free cash flow was also negative (-$325.1M), following another negative year in 2024. This contrasts with positive operating and free cash flow in 2023 and especially strong cash generation in 2020, highlighting volatility. Sustained negative cash flow alongside high leverage increases refinancing and liquidity risk over time.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.21B	477.20M	407.30M	927.80M	957.40M
Gross Profit	1.07B	477.20M	239.60M	822.50M	861.40M
EBITDA	540.90M	519.10M	309.10M	406.00M	464.00M
Net Income	94.00M	21.60M	-158.50M	37.70M	160.90M
Balance Sheet
Total Assets	8.14B	7.88B	7.35B	7.92B	8.02B
Cash, Cash Equivalents and Short-Term Investments	300.70M	410.20M	250.70M	364.00M	689.30M
Total Debt	6.63B	6.32B	5.75B	6.09B	5.87B
Total Liabilities	6.92B	6.66B	6.11B	6.45B	6.45B
Stockholders Equity	1.22B	1.22B	1.23B	1.47B	1.56B
Cash Flow
Free Cash Flow	-325.10M	-399.20M	290.20M	-314.80M	347.50M
Operating Cash Flow	-318.10M	-379.30M	307.20M	-289.90M	431.70M
Investing Cash Flow	-7.00M	-19.90M	10.90M	39.40M	-238.70M
Financing Cash Flow	227.50M	563.10M	-409.40M	400.00K	-55.80M

Latitude Group Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1.06
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:LFS, the sentiment is Neutral. The current price of 1.06 is above the 20-day moving average (MA) of 0.94, above the 50-day MA of 1.00, and below the 200-day MA of 1.08, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 46.14 is Neutral, neither overbought nor oversold. The STOCH value of 78.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AU:LFS.

Latitude Group Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PPM	69 Neutral	AU$1.08B	10.25	12.11%	11.71%	-6.49%	-5.40%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
PLT	67 Neutral	AU$168.93M	4.81	95.31%	―	19.38%	―
CCP	59 Neutral	AU$829.05M	8.81	11.07%	4.81%	5.01%	85.56%
HUM	56 Neutral	AU$350.01M	12.64	7.83%	2.84%	7.64%	463.49%
LFS	52 Neutral	AU$977.35M	10.40	5.01%	6.60%	14.81%	―
LFG	50 Neutral	AU$1.17B	8.05	11.19%	11.83%	2.11%	15.71%

Latitude Group Holdings Ltd. Corporate Events

Latitude Faces Class Action Over Historical Interest-Free Ads

Latitude Group Holdings has acknowledged that a class action has been filed in the Queensland Supreme Court against its subsidiary Latitude Finance Australia and retail partner Harvey Norman Holdings. The action concerns historical advertisements promoting Interest Free Plans on the Latitude GO Mastercard between 1 January 2020 and 11 August 2021.

The company said the proceeding remains at an early stage and has described the claims as fundamentally flawed. Latitude indicated it intends to vigorously defend the case, signalling a potentially protracted legal process that could test its marketing practices and its broader partnership-based credit model.

The most recent analyst rating on (AU:LFS) stock is a Hold with a A$1.20 price target. To see the full list of analyst forecasts on Latitude Group Holdings Ltd. stock, see the AU:LFS Stock Forecast page.

Latitude Group Declares Semi-Annual Dividend of AUD 0.05 Per Share

Latitude Group Holdings has declared a fully paid ordinary share dividend of AUD 0.05 for the six-month period ended 31 December 2025, with an ex-dividend date of 20 March 2026 and a record date of 23 March 2026. The payment is scheduled for 21 April 2026, providing income to shareholders and signalling continued capital returns, subject to any required regulatory or corporate approvals.

The announced dividend aligns with Latitude’s regular semi-annual distribution cycle, underscoring the company’s capacity to generate distributable profits from its financial services operations. The payout schedule may influence trading around the ex-date and reinforces Latitude’s positioning as an income-generating stock within Australia’s listed non-bank financials sector.

The most recent analyst rating on (AU:LFS) stock is a Sell with a A$0.94 price target. To see the full list of analyst forecasts on Latitude Group Holdings Ltd. stock, see the AU:LFS Stock Forecast page.

Latitude details 2025 performance, balance sheet and funding profile

Latitude Group Holdings has released its Management Discussion & Analysis for the full year ended 31 December 2025, providing additional detail on its financial performance, balance sheet and capital position beyond the statutory financial report. The document outlines trends in volumes, receivables, net interest income and operating expenses, while also discussing credit losses, provisions and asset quality, giving investors a clearer view of the group’s profitability drivers and risk profile.

The analysis also focuses on funding and liquidity, explaining how Latitude structures its funding base and capital profile to support ongoing lending operations and shareholder returns. By breaking down half‑on‑half and year‑on‑year movements, the company aims to enhance transparency over operational momentum and financial resilience, information that is likely to be closely watched by lenders, investors and other stakeholders in the consumer finance sector.

The most recent analyst rating on (AU:LFS) stock is a Sell with a A$0.94 price target. To see the full list of analyst forecasts on Latitude Group Holdings Ltd. stock, see the AU:LFS Stock Forecast page.

Latitude posts strong FY25 profit on record volumes and wider margins

Latitude Group Holdings reported a strong FY25, with cash NPAT rising 59% to $105.1 million and statutory NPAT from continuing operations up 208%, driven by record $9.1 billion in credit card spend and loan originations, higher receivables of $7.2 billion and expanding net interest margins. The group improved operating leverage via a lower cost-to-income ratio, maintained disciplined credit performance, strengthened its balance sheet through $3.0 billion in new and refinanced funding, and lifted shareholder returns with higher fully franked dividends, while pursuing growth via new retail partnerships, adjacent segments and ongoing investment in technology and AI to support long-term, sustainable expansion.

Latitude expects its sharpened focus on core consumer segments in Australia and New Zealand to support continued disciplined growth, aided by existing and new partner relationships across retail, travel and healthcare. Management plans to manage interest margin volatility through pricing, hedging and portfolio mix, keep credit losses within targeted ranges through tight underwriting, and leverage sustained profitability and capital discipline to create capacity for further capital returns, underpinned by ongoing investments in cyber security and advanced technology capabilities.

The most recent analyst rating on (AU:LFS) stock is a Sell with a A$0.94 price target. To see the full list of analyst forecasts on Latitude Group Holdings Ltd. stock, see the AU:LFS Stock Forecast page.

Latitude Group Sets April 2026 Distribution on Capital Notes

Latitude Group Holdings Limited has announced a new quarterly distribution for its Latitude Capital Notes (ASX: LFSPA), a perpetual, non-cumulative note paying a margin of 4.75% over 3-month BBSW, with a distribution amount of AUD 1.4778 per note. The payment, which remains at the company’s absolute discretion, is scheduled for 27 April 2026, with an ex-date of 16 April 2026 and a record date of 17 April 2026, underscoring Latitude’s ongoing servicing of its hybrid capital instruments and its continued engagement with noteholders as a source of funding.

The most recent analyst rating on (AU:LFS) stock is a Sell with a A$0.96 price target. To see the full list of analyst forecasts on Latitude Group Holdings Ltd. stock, see the AU:LFS Stock Forecast page.

Latitude Schedules FY25 Full-Year Results Briefing for 20 February

Latitude Group Holdings Ltd has announced it will release its full-year financial results for the year ended 31 December 2025 on 20 February 2026, with Managing Director and CEO Bob Belan and CFO Guillaume Leger to host an investor and analyst briefing at 10:30am AEDT. The company will provide a live webcast and pre-registered conference call for participants, and the presentation materials and a replay of the briefing will be made available via the ASX and Latitude’s investor website, underscoring its ongoing engagement with the investment community and commitment to transparent disclosure of financial performance.

The most recent analyst rating on (AU:LFS) stock is a Sell with a A$0.96 price target. To see the full list of analyst forecasts on Latitude Group Holdings Ltd. stock, see the AU:LFS Stock Forecast page.

Latitude Group Holdings Ltd. Announces Cessation of Securities

Latitude Group Holdings Ltd. announced the cessation of 110,618 securities, specifically CAP NOTE 3-BBSW+4.75% PERP NON-CUM RED T-10-26, due to an on-market buy-back effective December 5, 2025. This move is part of the company’s capital management strategy, potentially impacting its financial structure and signaling a focus on optimizing shareholder value.

The most recent analyst rating on (AU:LFS) stock is a Hold with a A$1.00 price target. To see the full list of analyst forecasts on Latitude Group Holdings Ltd. stock, see the AU:LFS Stock Forecast page.