Lycopodium Limited (LYL) AI Stock Analysis

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Lycopodium Limited

(Sydney:LYL)

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Neutral 67 (OpenAI - 5.2)

Rating:67Neutral

Price Target:

AU$16.00

▲(27.80% Upside)

Action:DowngradedDate:02/18/26

The score is driven primarily by solid financial quality (high margins, low leverage, strong ROE) tempered by weaker growth signals (slightly negative revenue growth and declining free cash flow growth). Technicals are mixed with near-term softness despite a longer-term uptrend. Valuation and dividend support the profile, while the earnings call adds modest risk from guidance revision and project timing delays, partially offset by a strong order book/pipeline and stable profitability.

Positive Factors

High margins and strong ROE

Sustained high gross and operating margins plus a 27.8% ROE indicate durable pricing power and efficient project delivery. These margins provide structural resilience through commodity cycles, enabling reinvestment and consistent profitability even if revenue growth softens.

Prudent balance sheet and low leverage

Very low financial leverage and a strong equity base support capital-light operations and protect cash flow during project timing shifts. This balance sheet strength underpins capacity to invest selectively, sustain dividends and absorb cyclicality without refinancing stress.

Large committed contracts and strong pipeline

A sizable committed order book and a deep FEED/study pipeline give multi-period revenue visibility and backlog conversion optionality. This structural demand supports future utilization, underwrites capacity investments and helps smooth revenue into subsequent reporting periods.

Negative Factors

Material project timing delays

Multimonth deferrals on major projects shift revenue recognition and reduce near-term utilization. Persistent timing slippage raises execution risk, increases working capital needs and can depress margin leverage from pre-built capacity until projects commence.

Declining free cash flow and weak revenue growth

Negative free cash flow growth and falling revenues constrain organic funding for growth and increase sensitivity to project timing. If these trends persist, they erode financial flexibility, raise reliance on working capital management and limit the ability to expand without affecting margins.

Carrying costs from capacity build-out

Proactive hiring and office expansion raise fixed operating costs; when project commencements lag, utilization falls and margin compression follows. This structural mismatch between capacity and billed work increases breakeven and can pressure sustained margin performance until utilization recovers.

Lycopodium Limited (LYL) vs. iShares MSCI Australia ETF (EWA)

Market Cap

AU$554.30M

Dividend Yield2.51%

Average Volume (3M)40.13K

Price to Earnings (P/E)7.4

Beta (1Y)0.71

Revenue Growth-3.08%

EPS Growth-16.35%

CountryAU

Employees1,300

SectorIndustrials

Sector Strength72

IndustryEngineering & Construction

Share Statistics

EPS (TTM)0.46

Shares Outstanding39,740,227

10 Day Avg. Volume32,833

30 Day Avg. Volume40,132

Financial Highlights & Ratios

PEG Ratio-0.57

Price to Book (P/B)2.71

Price to Sales (P/S)1.23

P/FCF Ratio11.68

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

EPS Forecast (FY)1

Revenue Forecast (FY)AU$394.85M

Lycopodium Limited Business Overview & Revenue Model

Company DescriptionLycopodium Limited (LYL) is an Australian engineering and project management company that specializes in providing services to the resources, infrastructure, and industrial sectors. The company focuses on delivering high-quality solutions in areas such as project development, engineering design, and asset management. Lycopodium's core offerings include feasibility studies, detailed engineering, procurement, and construction management, primarily for mining and mineral processing projects.

How the Company Makes MoneyLycopodium generates revenue through multiple streams, primarily by charging fees for its engineering, project management, and consulting services. The company typically operates on a contract basis, earning income from fixed-price contracts, time and materials contracts, and performance-based contracts, which allow for flexibility in pricing based on project parameters. Key revenue streams include project delivery for mining companies, consultancy services for feasibility studies, and ongoing support for asset management. Additionally, Lycopodium has formed strategic partnerships with various mining firms and industry stakeholders, enhancing its market presence and securing repeat business, which contributes significantly to its earnings.

Lycopodium Limited Earnings Call Summary

Earnings Call Date:Feb 17, 2026

(Q2-2026)

% Change Since: |

Next Earnings Date:Aug 25, 2026

Earnings Call Sentiment Positive

The call presented a generally positive underlying business performance: solid H1 revenue ($174.5M), NPAT ($18.3M) and a strong opportunity pipeline ($1.3B) alongside reinstated dividends and geographic expansion. The main negatives were timing delays on several material projects (e.g., Blackwater ~3–4 months), a slower-than-expected near-term contribution from SAXUM, softer Q2 utilization and carrying costs from pre-emptive capacity builds. Management expects utilization and revenues to recover in H2 and FY27 driven by the strong study/FEED pipeline. Overall, the positive metrics, pipeline and balance sheet strength outweigh the timing and short-term operational challenges.

Q2-2026 Updates

Positive Updates

Revenue and Profitability for H1 FY26

Reported revenue of $174.5 million and NPAT of $18.3 million for the half, delivering a NPAT margin of 10.5%, in line with management's target.

Strong Order Book and Pipeline

Committed contracts valued at $415 million (up on prior period) and a revenue opportunity pipeline of $1.3 billion (also up on prior period), indicating strong near- to medium-term demand.

Dividend Restored and Strong Cash Position

Board declared a fully-franked dividend of $0.22 per share for the half and reported strong cash at bank, reflecting healthy balance sheet and shareholder returns.

Guidance Issued for FY26

Revised full-year guidance for group revenue of $370 million–$410 million and NPAT of $37 million–$41 million, consistent with an approximate 10% NPAT margin target.

Geographic and Commodity Diversification

Operations across 18 offices worldwide with broad commodity exposure (gold, lithium, copper, uranium, silver, etc.), and expansion momentum in the Americas following the SAXUM acquisition.

SAXUM Acquisition Strategic Benefit

SAXUM has improved access to Latin American opportunities (e.g., Unico Silver PFS) and enabled participation in new bids in Argentina and the Americas, supporting long-term growth despite a slower immediate start.

Growing Study and FEED Activity

Multiple FEED wins (including Winu copper, Assafo‑Dibibango gold, Pilgangoora lithium plant expansion) and a strong study pipeline and number of early-phase opportunities, positioning the company for future delivery work.

People, Capacity and Safety

Continued investment in people and capacity (planning increases in Perth, Toronto, Cape Town, Lima and Manila) and an 'exceptional safety track record', supporting sustainable delivery capability.

Capital-Light Business with Strong Alignment

Approximately 30% ownership held by board and management, low capital intensity and disciplined risk management highlighted as enduring strengths.

Negative Updates

Timing Delays on Material Projects

Notable shift-to-the-right for material projects (Blackwater flagged as ~3–4 month delay), which has impacted forecasts and timing of revenue recognition for the group.

SAXUM Performance Slower Than Expected Short-Term

SAXUM's own revenue contribution has been slower than initially anticipated following acquisition, creating a slower near-term uplift despite strategic long-term benefits.

Softening Utilization in Q2

Utilization softened in the second quarter (after reasonably high utilization in Q1); management noted some operational centers ran lower utilization, though group remained above target and H2 recovery is expected.

Carrying Costs from Capacity Build-Out

Management retained and grew headcount and office capacity in anticipation of awards; this led to carrying costs when project start timings slipped, reducing near-term margin leverage.

Increased Project Expenses and New Equipment Business Costs

Higher project expenses were reported relating to FG Gold/Baomahun work and expansion of equipment/OEM activities (Pudco), which contributed to increased direct costs in the half.

Guidance Revised Due to Project Timing

Management revised FY26 guidance primarily because several major prospects shifted timing; while guidance remains positive, the revision reflects execution/timing risk.

Company Guidance

Management revised FY26 guidance to group revenue of $370–$410 million and NPAT of $37–$41 million (around a 10% NPAT margin), noting H1 results of $174.5 million revenue and $18.3 million NPAT (10.5% margin) — implying H2 needs about $195.5–$235.5 million revenue and $18.7–$22.7 million NPAT to meet guidance; committed contracts total $415 million and the revenue opportunity pipeline is $1.3 billion, the Board declared a $0.22 per share fully‑franked interim dividend, and management said a ~3–4 month timing shift on major prospects (notably Blackwater) drove the revision while they continue to invest in capacity across Perth, Toronto, Cape Town, Lima and Manila and expect a strong second half.

Lycopodium Limited Financial Statement Overview

Summary

Strong profitability and efficiency (92.1% gross margin, 15.9% EBIT margin, 20.3% EBITDA margin) and a solid balance sheet with low leverage (debt-to-equity 0.11) and strong ROE (27.8%). Offsetting factors include slightly negative revenue growth (-0.5%) and declining free cash flow growth (-9.1%), which temper the otherwise stable financial profile.

Income Statement

Positive

Lycopodium Limited shows strong profitability with a high gross profit margin of 92.1% and a solid net profit margin of 12.6% for the latest year. However, the revenue growth rate is negative at -0.5%, indicating a decline in sales. The EBIT and EBITDA margins are healthy at 15.9% and 20.3%, respectively, reflecting efficient cost management.

Balance Sheet

Positive

The company maintains a low debt-to-equity ratio of 0.11, indicating prudent financial leverage. Return on equity is robust at 27.8%, showcasing effective use of shareholder funds. The equity ratio stands at 63.0%, suggesting a strong equity base relative to total assets.

Cash Flow

Positive

Operating cash flow to net income ratio is 0.88, indicating good cash generation relative to earnings. However, free cash flow growth is negative at -9.1%, which could be a concern if it persists. The free cash flow to net income ratio is 0.83, showing that a significant portion of earnings is converted to free cash flow.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	341.89M	333.94M	344.55M	323.88M	228.71M	158.06M
Gross Profit	75.00M	307.69M	312.49M	80.35M	42.38M	42.99M
EBITDA	55.00M	67.82M	74.55M	70.48M	45.64M	25.95M
Net Income	35.22M	42.22M	50.71M	46.78M	27.18M	14.20M
Balance Sheet
Total Assets	264.32M	241.08M	217.04M	219.83M	224.12M	169.66M
Cash, Cash Equivalents and Short-Term Investments	80.02M	79.67M	68.19M	82.41M	100.95M	76.84M
Total Debt	26.79M	16.42M	12.33M	15.70M	16.65M	17.90M
Total Liabilities	105.85M	90.61M	89.60M	106.87M	124.45M	81.99M
Stockholders Equity	155.94M	151.87M	128.06M	114.64M	100.50M	88.38M
Cash Flow
Free Cash Flow	33.85M	35.24M	26.76M	15.38M	37.72M	-15.82M
Operating Cash Flow	36.95M	37.21M	27.84M	19.79M	41.68M	-12.91M
Investing Cash Flow	-10.03M	-922.21K	1.26M	-4.45M	655.17K	-2.61M
Financing Cash Flow	-25.42M	-24.76M	-40.38M	-34.05M	-18.51M	-11.74M

Lycopodium Limited Technical Analysis

Technical Analysis Sentiment

Negative

Last Price12.52

Price Trends

50DMA

14.82

Negative

100DMA

13.78

Positive

200DMA

12.52

Positive

Market Momentum

MACD

-0.23

Positive

RSI

35.60

Neutral

STOCH

41.29

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:LYL, the sentiment is Negative. The current price of 12.52 is below the 20-day moving average (MA) of 15.02, below the 50-day MA of 14.82, and above the 200-day MA of 12.52, indicating a neutral trend. The MACD of -0.23 indicates Positive momentum. The RSI at 35.60 is Neutral, neither overbought nor oversold. The STOCH value of 41.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:LYL.

Lycopodium Limited Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GNP	76 Outperform	AU$1.45B	11.36	25.18%	0.57%	36.30%	82.20%
DUR	74 Outperform	AU$567.27M	9.20	34.21%	2.25%	3.10%	5.08%
ACF	69 Neutral	AU$289.75M	12.10	16.13%	5.71%	25.14%	-14.54%
LYL	67 Neutral	AU$554.30M	7.39	29.67%	2.51%	-3.08%	-16.35%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
GNG	63 Neutral	AU$735.19M	10.83	50.61%	5.24%	12.96%	8.19%

* Industrials Sector Average

Performance Comparison

AU:LYL

Lycopodium Limited

13.86

4.12

42.30%

AU:ACF

Acrow Formwork and Construction Services Limited

0.91

-0.08

-8.59%

AU:GNP

GenusPlus Group Ltd.

8.20

5.47

200.37%

AU:DUR

Duratec Limited

2.20

0.72

48.35%

AU:GNG

GR Engineering Services Ltd

4.27

1.60

60.04%

Lycopodium Limited Corporate Events

Lycopodium Sets Date for 1H FY26 Results and Investor Webinar

Feb 4, 2026

Lycopodium Limited has announced that it will release its half-year financial results for the period ended 31 December 2025 on 18 February 2026 and will host a same-day webinar led by its managing director and chief financial officer to present the figures and engage with investors. The planned webcast, which will include a Q&A session for live and pre-submitted questions, signals the company’s ongoing efforts to maintain active communication with the market and provide stakeholders with timely insight into its performance and operational outlook.

The most recent analyst rating on (AU:LYL) stock is a Buy with a A$17.50 price target. To see the full list of analyst forecasts on Lycopodium Limited stock, see the AU:LYL Stock Forecast page.

Lycopodium Limited Addresses Late Lodgment of Director Interest Notices

Dec 12, 2025

Lycopodium Limited addressed a late lodgment of Appendices 3Y related to changes in directors’ securities holdings, attributing the delay to an administrative oversight. The company emphasized its commitment to compliance with ASX Listing Rules through existing policies and communication with directors, ensuring such oversights are unlikely to recur.