Matrix Composites & Engineering Ltd (MCE) AI Stock Analysis

• Market Cap: AU$55.05M
• Dividend Yield: N/A
• Average Volume (3M): 287.58K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.06
• Revenue Growth: -12.07%
• EPS Growth: -160.00%
• Country: AU
• Employees: 383
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): -0.04
• Shares Outstanding: 224,685,990
• 10 Day Avg. Volume: 93,359
• 30 Day Avg. Volume: 287,579
• PEG Ratio: 0.14
• Price to Book (P/B): 1.66
• Price to Sales (P/S): 0.65
• P/FCF Ratio: -9.25
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): >-0.01
• Revenue Forecast (FY): AU$86.60M

• Rating: 39 Underperform
• Price Target: AU$0.25 ▲(2.50% Upside)
• Action: Downgraded Date: 02/03/26
• Date: Action: Downgraded 02/03/26

The score is driven primarily by weak financial performance (declining revenue, losses, high leverage, and cash flow challenges). Technicals also look soft with the share price below key moving averages and negative MACD. Valuation is pressured by negative earnings (negative P/E) and no dividend yield data.

Positive Factors

Niche subsea focus

Concentrated exposure to subsea engineering creates durable competitive positioning: specialized product know-how and long project timelines make customer relationships sticky and create multi-month to multi-year revenue opportunity windows, supporting structural revenue visibility when project activity resumes.

Project and service revenue mix

A dual revenue model—project deliveries plus aftermarket services—provides structural resilience. Project contracts drive larger lump-sum revenues, while service and maintenance offer recurring, higher-visibility cashflows that can stabilize revenue and improve lifetime customer economics over multiple quarters.

Positive gross profit margin

Maintaining a positive gross margin indicates core engineering and manufacturing economics can cover direct costs. That foundation supports margin recovery as overhead is managed and volumes normalize, making operational fixes and scale gains more likely to translate into improved operating profitability over several quarters.

Negative Factors

Sharp revenue decline

A large decline in revenue materially reduces scale and weakens the firm's ability to absorb fixed costs, lengthening the runway to profitability. For a project-driven subsea business, sustained top-line declines impair contract competitiveness, supplier terms, and future order momentum over a multi-quarter horizon.

High leverage

Elevated debt levels constrain financial flexibility and increase interest and covenant risk, limiting the firm's ability to fund working capital or pursue new projects. In a cyclical offshore market, high leverage magnifies downside and may force deleveraging actions that could dilute shareholders or slow execution.

Weak cash generation

Persistent negative free cash flow and poor OCF-to-net-income dynamics signal difficulty converting reported profits into usable liquidity. That undermines capacity to finance project pipelines, service obligations, and capex internally, elevating refinancing or external funding risk across the next several quarters.

Matrix Composites & Engineering Ltd Business Overview & Revenue Model

Company Description

Matrix Composites & Engineering Ltd, together with its subsidiaries, designs, engineers, manufactures, and sells composite and material technology solutions to the oil and gas, civil and infrastructure, resources, defense, and transportation industries in Australia and internationally. It offers autonomous underwater vehicles/unmanned underwater vehicles buoyancy, distributed buoyancy module systems, drill riser buoyancy systems, matrix longitudinal groove system (LGS) riser buoyancy system, and Matrix LGS surf systems, as well as Matrix MarineShield, a wraparound corrosion protection system for the preservation of pipelines, risers, piles, and other critical field infrastructure. The company also provides well construction and completion products, such as matrix conductor centralizers for fixed platform wells; matrix riser sealing mandrel to enhance the safety of completion and workover operations on board floating drilling units and workover vessels; and Max R low friction centralizers for well and drilling completions. In addition, it offers VIV suppression equipment for rigid pipelines. Further, the company distributes coatings, including Humiclean, an environmentally friendly, biodegradable, non-toxic, and non-VOC cleaning agent; Humidur Char, a passive fire protection product; Humidur FP, a solvent free epoxy coating; and Humidur TC, a solvent-free epoxy siloxane hybrid top coating. Additionally, it provides Matrix Fibrenetic, a rapid installation and lightweight carbon fiber repair system to remediate corroded structures; Matrix Rotolining, an internal lining system; Kinetica dropped object protection cells for protecting critical equipment and work site areas from dropped objects; Kinetic syntactic foam; and provision of inspection, maintenance, and repair services. The company was incorporated in 1990 and is headquartered in Henderson, Australia.

How the Company Makes Money

MCE generates revenue through multiple streams, primarily from the sale of its composite products and engineering services. The company engages in contracts with major clients in the oil and gas sector, providing bespoke solutions and products tailored to specific project requirements. Additionally, MCE benefits from long-term partnerships with key industry players, which contribute to a steady flow of orders. The company also invests in research and development to innovate new products, ensuring a competitive edge in the market. Revenue is further bolstered by maintenance and support services for its products, along with strategic collaborations that enhance its market reach and operational capabilities.

Matrix Composites & Engineering Ltd Financial Statement Overview

Summary

Weak fundamentals across statements: revenue declined sharply (-23.49%) with negative EBIT and net profit margins, high leverage (debt-to-equity 1.26) and negative ROE, and cash generation concerns including negative free cash flow growth and an unfavorable operating cash flow to net income relationship.

Income Statement

Matrix Composites & Engineering Ltd has experienced a significant decline in revenue, with a negative revenue growth rate of -23.49% in the latest period. The company also shows negative net profit and EBIT margins, indicating operational challenges. However, the gross profit margin remains positive, suggesting some ability to cover direct costs.

Balance Sheet

The company's balance sheet reveals a high debt-to-equity ratio of 1.26, indicating significant leverage. The negative return on equity highlights profitability issues, while the equity ratio suggests a moderate level of equity financing. Overall, the balance sheet reflects financial instability and potential risk due to high leverage.

Cash Flow

The cash flow statement shows negative free cash flow growth and a negative operating cash flow to net income ratio, indicating cash flow challenges. Despite a high free cash flow to net income ratio, the overall cash flow position is weak, reflecting difficulties in generating sufficient cash from operations.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	62.24M	74.77M	85.04M	47.20M	28.63M	17.62M
Gross Profit	2.46M	10.77M	17.53M	3.99M	1.20M	-3.56M
EBITDA	-2.95M	3.67M	11.77M	14.64M	-42.00K	-21.18M
Net Income	-12.66M	-2.22M	3.65M	8.68M	-4.78M	-27.92M
Balance Sheet
Total Assets	78.49M	80.78M	95.15M	79.89M	33.22M	36.50M
Cash, Cash Equivalents and Short-Term Investments	18.03M	18.34M	23.32M	20.02M	7.59M	7.16M
Total Debt	69.94M	37.06M	39.39M	35.48M	27.26M	27.72M
Total Liabilities	58.15M	51.45M	64.14M	53.12M	34.52M	39.36M
Stockholders Equity	20.34M	29.32M	31.02M	26.77M	-1.30M	-2.86M
Cash Flow
Free Cash Flow	3.04M	-5.27M	6.54M	-13.23M	-5.66M	-7.04M
Operating Cash Flow	5.67M	-416.00K	10.88M	-10.68M	-4.11M	-3.91M
Investing Cash Flow	-3.19M	-5.14M	2.99M	-9.99M	-1.45M	-3.13M
Financing Cash Flow	-482.00K	-50.00K	-3.10M	25.63M	5.99M	-475.00K

Matrix Composites & Engineering Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.24
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:MCE, the sentiment is Positive. The current price of 0.24 is above the 20-day moving average (MA) of 0.23, below the 50-day MA of 0.24, and below the 200-day MA of 0.24, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 52.08 is Neutral, neither overbought nor oversold. The STOCH value of 83.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:MCE.

Matrix Composites & Engineering Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EVZ	65 Neutral	AU$35.84M	14.25	3.66%	―	-9.21%	-42.37%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
VBC	63 Neutral	AU$79.60M	15.12	17.38%	0.49%	-8.28%	89.71%
SOP	44 Neutral	AU$13.50M	-2.28	-90.66%	―	-6.10%	12.50%
MCE	39 Underperform	AU$55.05M	-4.34	-7.05%	―	-12.07%	-160.00%

Matrix Composites & Engineering Ltd Corporate Events

Matrix Composites & Engineering sets investor call on 1H FY26 results

Matrix Composites & Engineering will host an investor conference call on 27 February 2026, led by CEO Aaron Begley and CFO Brendan Cocks, to discuss its financial results for the first half of FY2026. The company will release its accounts for the six months to 31 December 2025, along with a results presentation and announcement, ahead of the call, which will include a Q&A session and be made available in archived form for stakeholders unable to attend live.

The scheduled briefing underscores Matrix’s effort to engage the market and provide transparency around its financial performance at a time when it continues to pursue global opportunities in advanced materials across multiple industries. Investors and analysts will be looking to the upcoming disclosures and management commentary for insight into the company’s operational trajectory, export performance, and positioning within key resource and infrastructure markets.

The most recent analyst rating on (AU:MCE) stock is a Hold with a A$0.25 price target. To see the full list of analyst forecasts on Matrix Composites & Engineering Ltd stock, see the AU:MCE Stock Forecast page.

Matrix Composites & Engineering Grants Performance Rights and Options to Director

Matrix Composites & Engineering Ltd has disclosed a change in director Brendan Cocks’ interests, with the grant of 1,519,680 performance rights and 563,948 options at no cash consideration. The new securities, comprising FY24 and FY25 performance rights and FY24 options, were issued as part of the company’s incentive arrangements and did not involve any on-market trading, signalling ongoing alignment of executive remuneration with company performance and shareholder interests.

The most recent analyst rating on (AU:MCE) stock is a Hold with a A$0.22 price target. To see the full list of analyst forecasts on Matrix Composites & Engineering Ltd stock, see the AU:MCE Stock Forecast page.

Matrix Composites & Engineering Grants New Performance Rights and Options to Director

Matrix Composites & Engineering has disclosed a change in the securities held by director Aaron Begley, who has been issued 2,237,648 performance rights and 827,123 options at no consideration. The new securities, comprising FY24 and FY25 performance rights and FY24 options, represent equity-based incentives that further align the director’s interests with shareholder value and signal the company’s continued use of performance-linked remuneration for its leadership team.

The most recent analyst rating on (AU:MCE) stock is a Hold with a A$0.22 price target. To see the full list of analyst forecasts on Matrix Composites & Engineering Ltd stock, see the AU:MCE Stock Forecast page.

Matrix Composites & Engineering Issues New Performance Rights and Options Under Incentive Plan

Matrix Composites & Engineering has notified the market of the issue of 5,985,958 unquoted performance rights and 1,391,071 unquoted options (expiring December 2030 with an exercise price of $0.434) under its employee incentive arrangements. The move expands the company’s pool of equity‑based rewards for staff and executives, reinforcing the use of long‑term incentives to align employees’ interests with shareholders and potentially impacting future dilution and capital structure if these securities vest or are exercised.

The most recent analyst rating on (AU:MCE) stock is a Hold with a A$0.22 price target. To see the full list of analyst forecasts on Matrix Composites & Engineering Ltd stock, see the AU:MCE Stock Forecast page.

Matrix Composites & Engineering Ltd Announces Cessation of Convertible Notes

Matrix Composites & Engineering Ltd announced the cessation of 7,485,000 convertible notes due to repayment or redemption without conversion. This move reflects the company’s ongoing financial management strategy and may impact its capital structure, potentially affecting stakeholders and market perception.

The most recent analyst rating on (AU:MCE) stock is a Hold with a A$0.22 price target. To see the full list of analyst forecasts on Matrix Composites & Engineering Ltd stock, see the AU:MCE Stock Forecast page.

Matrix Completes Debt Refinancing with Convertible Note Redemption

Matrix Composites & Engineering Ltd has redeemed its $7.5 million Convertible Note, originally issued to Collins Street Asset Management Pty Ltd, by utilizing a new term loan from National Australia Bank. This strategic move is part of Matrix’s broader debt refinancing initiative, resulting in a simplified debt structure that supports future business opportunities without impacting the company’s net debt position.

The most recent analyst rating on (AU:MCE) stock is a Hold with a A$0.22 price target. To see the full list of analyst forecasts on Matrix Composites & Engineering Ltd stock, see the AU:MCE Stock Forecast page.