Smartgroup Corporation Ltd (AU:SIQ)
ASX:SIQ
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Smartgroup Corporation Ltd
(Sydney:SIQ)
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Rating:75Outperform
Price Target:
AU$8.50
â–˛(5.85% Upside)
Action:ReiteratedDate:02/28/26
The score is driven primarily by strong underlying financial performance and a constructive earnings-call outlook (solid growth, high margins, strong cash conversion and continued dividends), supported by an attractive yield with a moderate P/E. The main offsets are cash-flow volatility, rising leverage over time, and only moderate technical momentum (slightly negative MACD and investment-driven near-term margin pressure).
Positive Factors
Scale & recurring revenue
A large and growing base of salary-packaged employees and leases creates durable recurring fee income and distribution scale. This expands cross-sell potential, strengthens employer relationships and raises barriers to entry, sustaining revenue visibility and long-term cash flow generation.
Negative Factors
Free cash flow volatility
A large FCF decline in 2025 signals volatile cash conversion driven by working-capital or investment swings. Persisting volatility would weaken the reliability of internal funding for capex, dividends or buybacks and increase reliance on external financing in downside scenarios.
Read all positive and negative factors
Positive Factors
Negative Factors
Scale & recurring revenue
A large and growing base of salary-packaged employees and leases creates durable recurring fee income and distribution scale. This expands cross-sell potential, strengthens employer relationships and raises barriers to entry, sustaining revenue visibility and long-term cash flow generation.
Read all positive factors
Smartgroup Corporation Ltd (SIQ) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$1.09B
Dividend Yield5.51%
Average Volume (3M)457.95K
Price to Earnings (P/E)14.9
Beta (1Y)0.88
Revenue Growth11.64%
EPS Growth18.08%
CountryAU
Employees870
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.31
Shares Outstanding135,731,890
10 Day Avg. Volume530,152
30 Day Avg. Volume457,947
Financial Highlights & Ratios
PEG Ratio2.89
Price to Book (P/B)4.28
Price to Sales (P/S)3.60
P/FCF Ratio10.78
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$9.58Price Target Upside19.28% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)0.64
Revenue Forecast (FY)AU$344.94M
Smartgroup Corporation Ltd Business Overview & Revenue Model
Company Description
Smartgroup Corporation Ltd provides employee management services in Australia. It operates through Outsourced Administration (OA); Vehicle Services (VS); and Software, Distribution, and Group Services (SDGS) segments. The OA segment offers outsour...
How the Company Makes Money
Smartgroup makes money primarily by administering salary packaging programs and by arranging and managing novated vehicle leases for employees through employer relationships. Key revenue streams include: (1) Salary packaging administration fees: f...
Smartgroup Corporation Ltd Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 26, 2026
Earnings Call Sentiment Positive
The earnings call presents a broadly positive picture: strong top-line growth, meaningful EBITDA and NPATA expansion, robust cash generation, record customer and fleet metrics, and clear strategic progress (digital transformation, partnerships and operational efficiency). Most negative points are manageable and investment-driven — a planned ramp of technology and automation in 2026 that will weigh on near-term margins, a sharp decline in PHEV orders after a government incentive ended (with policy review uncertainty), and increased D&A and non-staff spending tied to growth and modernization. On balance, the company shows scalable growth, a conservative balance sheet, and constructive capital returns, making the overall tone optimistic despite short-term execution and policy risks.Positive Updates
Revenue Growth
Revenue increased 8% year-on-year to $329.3 million in FY2025, driven by higher novated leasing volumes and new client wins.
Negative Updates
Policy-Driven PHEV Volume Volatility
New orders for plug-in hybrids declined 31% year-on-year following the federal government electric car discount policy ending on 31 March 2025; the policy review underway creates uncertainty for future PHEV demand and potential margin impacts.
Read all updates
Q4-2025 Updates
Positive
Negative
Revenue Growth
Revenue increased 8% year-on-year to $329.3 million in FY2025, driven by higher novated leasing volumes and new client wins.
Read all positive updates
Company Guidance
The company guided to an EBITDA margin target in the mid‑40s by 2027, driven by continued digital modernization, automation and AI investments, with 2026 technology CapEx budgeted at $11–13m (c.3–4% of 2025 revenue) and capitalized IT development of $12.6m in 2025; Smartgroup reaffirmed its capital allocation policy to pay fully franked dividends of 60–70% of NPATA (and return excess capital via specials or buybacks), having declared total 2025 fully franked dividends of $0.53 per share (90% of 2025 NPATA); it highlighted a conservative balance sheet (net debt $38.1m, 0.3x leverage), strong cash conversion (122% of NPATA) and the 2025 financial base (revenue $329.3m, net revenue $318m, EBITDA $135.3m at a 41% margin, NPATA $80.2m, ROE 30%) as the platform to achieve those targets.Smartgroup Corporation Ltd Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
78
Positive
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 329.31M | 305.84M | 251.61M | 224.70M | 221.80M |
| Gross Profit | 175.15M | 291.90M | 130.31M | 122.07M | 122.32M |
| EBITDA | 137.16M | 123.69M | 99.91M | 93.58M | 99.28M |
| Net Income | 79.44M | 75.60M | 61.92M | 58.78M | 58.81M |
Balance Sheet | |||||
| Total Assets | 714.40M | 653.36M | 417.53M | 405.84M | 408.26M |
| Cash, Cash Equivalents and Short-Term Investments | 312.70M | 34.65M | 32.79M | 62.73M | 32.45M |
| Total Debt | 97.16M | 84.36M | 72.30M | 64.39M | 38.09M |
| Total Liabilities | 437.33M | 395.07M | 173.71M | 165.50M | 142.03M |
| Stockholders Equity | 277.06M | 258.28M | 243.82M | 240.34M | 266.23M |
Cash Flow | |||||
| Free Cash Flow | 110.08M | 49.48M | 49.21M | 52.04M | 61.48M |
| Operating Cash Flow | 123.68M | 77.54M | 67.23M | 66.97M | 69.40M |
| Investing Cash Flow | -22.85M | -22.84M | -8.69M | -14.93M | -7.75M |
| Financing Cash Flow | -67.85M | -52.85M | -50.43M | -62.96M | -63.48M |
Smartgroup Corporation Ltd Technical Analysis
Positive
8.03
Price Trends
8.11
Negative
8.25
Negative
7.93
Positive
Market Momentum
-0.11
Negative
53.12
Neutral
81.60
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:SIQ, the sentiment is Positive. The current price of 8.03 is above the 20-day moving average (MA) of 7.93, below the 50-day MA of 8.11, and above the 200-day MA of 7.93, indicating a neutral trend. The MACD of -0.11 indicates Negative momentum. The RSI at 53.12 is Neutral, neither overbought nor oversold. The STOCH value of 81.60 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:SIQ.
Smartgroup Corporation Ltd Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | AU$191.79M | 5.06 | 12.32% | 4.11% | 27.05% | 520.93% | |
75 Outperform | AU$1.09B | 14.94 | 31.30% | 5.51% | 11.64% | 18.08% | |
75 Outperform | AU$845.20M | 5.57 | 10.55% | 10.58% | 16.61% | 3.07% | |
73 Outperform | AU$1.56B | 12.68 | 27.58% | 1.14% | 12.62% | 12.46% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | AU$221.85M | 43.95 | 10.41% | 0.11% | 24.47% | 21.28% | |
49 Neutral | AU$18.02M | -4.06 | -26.25% | ― | -13.52% | 7.82% |
* Industrials Sector Average
AU:SIQ
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Smartgroup Corporation Ltd Corporate Events
Pinnacle Exits Substantial Holder Position in Smartgroup
Mar 11, 2026
Pinnacle Investment Management Group and its named subsidiaries have notified Smartgroup Corporation that they have ceased to be a substantial shareholder in the company as of 6 March 2026. The change reflects a reduction in Pinnacle’s relev...
Smartgroup sets May 2026 AGM date and director nomination deadline
Mar 9, 2026
Smartgroup Corporation Ltd has scheduled its 2026 Annual General Meeting for Wednesday, 20 May 2026, with full details to be provided to shareholders in a forthcoming notice and corresponding market release. The company has also set Monday, 16 Mar...
Smartgroup updates market on director Scott Wharton’s increased shareholding
Mar 9, 2026
Smartgroup Corporation Ltd has disclosed a change in the securities held by director Scott Wharton, reflecting updates to his direct and indirect interests in the company’s ordinary shares and performance rights. Following the exercise of ve...
Smartgroup performance rights lapse trims outstanding equity pool
Mar 9, 2026
Smartgroup Corporation Ltd has notified the market of changes to its issued capital following the lapse of certain equity incentives. The company reported that 60,262 performance rights, classified under ASX code SIQAD, have ceased after their con...
Smartgroup Seeks ASX Quotation for 126,346 New Ordinary Shares
Mar 9, 2026
Smartgroup Corporation Ltd has applied to the ASX for quotation of 126,346 new ordinary fully paid shares, to be issued on 3 March 2026. The application, lodged as a new announcement on 9 March 2026, indicates that these securities arise from the ...
Smartgroup Appoints Paul Rogan to Board With No Initial Shareholding
Mar 2, 2026
Smartgroup Corporation has announced the appointment of Paul Rogan as a director effective 2 March 2026, formally notifying the ASX of his initial interests as required under listing rules. The company disclosed that Rogan currently holds no relev...
Smartgroup lodges updated ASX corporate governance statement and Appendix 4G
Feb 25, 2026
Smartgroup Corporation Ltd has lodged its updated corporate governance statement and Appendix 4G with the ASX for the financial year ended 31 December 2025, confirming that the statement is current as at 25 February 2026 and has been approved by t...
Smartgroup Links 2025 Results Briefing With Cultural and Social Focus
Feb 25, 2026
Smartgroup Corporation Ltd has released its CY 2025 investor presentation, framing its full-year 2025 results through remarks by Managing Director and CEO Scott Wharton and Chief Financial Officer Jason King. The release also highlights the compan...
Smartgroup lifts earnings and margins on record leasing and packaging demand
Feb 25, 2026
Smartgroup reported solid full-year 2025 results, with revenue up 8% to $329.3m and operating EBITDA rising 14% to $135.3m, lifting its margin to 41% on the back of higher novated leasing settlements and growing salary packaging customers. Strong ...
Smartgroup declares interim dividend of AUD 0.335 per share
Feb 25, 2026
Smartgroup Corporation Ltd has declared a fully paid dividend of AUD 0.335 per ordinary share for the six-month period ended 31 December 2025. The dividend applies to shareholders on the register as of 6 March 2026, with the stock trading ex-divid...
Smartgroup lifts 2025 profit and declares special dividend
Feb 25, 2026
Smartgroup Corporation Ltd has released its preliminary final report and 2025 annual report, showing a 7.7% rise in revenue to $329.3 million for the year ended 31 December 2025. Profit after tax attributable to shareholders increased 5.1% to $79....
Smartgroup Sets Date for 2025 Full-Year Results and Investor Briefing
Jan 23, 2026
Smartgroup Corporation has scheduled the release of its full-year results for the 12 months to 31 December 2025 for Thursday, 26 February 2026, before the market opens, and will accompany the announcement with a live audio briefing hosted by Manag...
Mitsubishi UFJ Financial Group Ceases to Be Substantial Holder in Smartgroup
Jan 21, 2026
Mitsubishi UFJ Financial Group, Inc. has lodged a notice indicating it has ceased to be a substantial holder in Smartgroup Corporation Ltd, following changes in relevant interests and associations involving entities it controls. The filing details...
First Sentier Group Ceases to Be Substantial Holder in Smartgroup
Jan 20, 2026
First Sentier Group Limited and a wide network of related entities and associates, ultimately linked to Mitsubishi UFJ Financial Group, have notified Smartgroup Corporation Ltd that they have ceased to be a substantial shareholder as of 16 January...
Mitsubishi UFJ Exits Substantial Holder Position in Smartgroup
Dec 29, 2025
Mitsubishi UFJ Financial Group, Inc. has notified Smartgroup Corporation Ltd that it has ceased to be a substantial holder in the company, lodging an official notice of ceasing to be a substantial holder dated 29 December 2025. The filing details ...
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.