Smartgroup Corporation Ltd (AU:SIQ)
ASX:SIQ
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Smartgroup Corporation Ltd
(Sydney:SIQ)
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Rating:80Outperform
Price Target:
AU$14.50
▲(65.34% Upside)
Action:Reiterated
Date:05/13/26
The score is driven primarily by strong underlying financial performance (high profitability and steady growth) and attractive valuation (low P/E with a solid dividend yield). Earnings-call commentary supports the outlook but flags near-term margin pressure from investment and some policy-related demand uncertainty. Technically, the trend is strong, but extreme overbought signals raise short-term pullback risk.
Positive Factors
High and sustainable margins
Consistently high EBITDA (~41%) and mid‑20% net margins indicate a structurally profitable business model with strong operating leverage from recurring administration fees and scale in novated leasing. Durable margins support reinvestment, dividend capacity and resilience across business cycles.
Negative Factors
Rising leverage trend
A clear upward trend in leverage since 2021 reduces financial flexibility if trading softens. Higher indebtedness increases interest and covenant risk during downturns and limits the company's capacity to fund large specials or aggressive M&A without altering capital return policies.
Read all positive and negative factors
Positive Factors
Negative Factors
High and sustainable margins
Consistently high EBITDA (~41%) and mid‑20% net margins indicate a structurally profitable business model with strong operating leverage from recurring administration fees and scale in novated leasing. Durable margins support reinvestment, dividend capacity and resilience across business cycles.
Read all positive factors
Smartgroup Corporation Ltd (SIQ) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$1.72B
Dividend Yield5.51%
Average Volume (3M)457.95K
Price to Earnings (P/E)20.4
Beta (1Y)0.82
Revenue Growth7.67%
EPS Growth5.03%
CountryAU
Employees870
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.61
Shares Outstanding138,151,640
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$11.01Price Target Upside25.50% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.66
Revenue Forecast (FY)AU$351.30M
Smartgroup Corporation Ltd Business Overview & Revenue Model
Company Description
Smartgroup Corporation Ltd, an Australian company, specializes in delivering comprehensive employee management solutions. The firm's operations are divided into three primary segments: Outsourced Administration (OA), Vehicle Services (VS), and Sof...
How the Company Makes Money
Smartgroup makes money mainly by administering salary packaging (including novated leasing) programs for employees on behalf of employers. Key revenue streams include: (1) Administration and service fees: recurring fees earned for setting up, mana...
Smartgroup Corporation Ltd Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 20, 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
8.77
Price Trends
10.60
Positive
9.35
Positive
8.76
Positive
Market Momentum
0.52
Positive
74.95
Negative
87.92
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 8.77 is below the 20-day moving average (MA) of 11.89, below the 50-day MA of 10.60, and above the 200-day MA of 8.76, indicating a bullish trend. The MACD of 0.52 indicates Positive momentum. The RSI at 74.95 is Negative, neither overbought nor oversold. The STOCH value of 87.92 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | AU$1.72B | 20.43 | 29.68% | 5.51% | 7.67% | 5.03% | |
76 Outperform | AU$222.08M | 12.52 | 12.32% | 4.11% | 9.90% | 216.48% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | AU$169.33M | 54.76 | 10.41% | 0.11% | 21.18% | -17.84% | |
53 Neutral | AU$54.11M | 24.99 | 9.18% | ― | 4.34% | ― |
* Industrials Sector Average
AU:SIQ
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Smartgroup Corporation Ltd Corporate Events
Smartgroup director John Prendiville trims indirect shareholding
Jun 9, 2026
Smartgroup Corporation non-executive director John Prendiville has reduced his indirect shareholding in the company through an on-market sale. The transaction, completed on 4 June 2026, involved the disposal of 200,000 ordinary shares for total co...
Daiichi-Linked Investor Ceases Substantial Holding in Smartgroup
May 28, 2026
TAL Daiichi Life Australia and its parent Daiichi Life Group have disclosed that they have ceased to be substantial shareholders in Smartgroup Corporation, after their deemed interest through Challenger Limited fell below the substantial holding t...
Challenger exits substantial holding in Smartgroup
May 28, 2026
Challenger Limited, a diversified financial services group, has notified the ASX that it and its associated entities have ceased to be substantial shareholders in salary packaging and fleet services provider Smartgroup Corporation Ltd. The change ...
Smartgroup CEO adjusts equity stake through incentive share issuance and sale
May 28, 2026
Smartgroup Corporation has disclosed changes to CEO Scott Wharton’s holdings, reflecting movements in both ordinary shares and performance rights under the company’s incentive structures. The update details direct and indirect interest...
Smartgroup Issues New Tranche of Unquoted Performance Rights Under Incentive Plan
May 28, 2026
Smartgroup Corporation Ltd has notified the market of the issue of 45,911 unquoted performance rights under its employee incentive scheme. These securities, issued on 25 May 2026 and not intended to be quoted on the ASX, form part of the company&#...
Smartgroup seeks ASX quotation for new employee incentive shares
May 28, 2026
Smartgroup Corporation Ltd has applied for quotation on the ASX of 753,086 ordinary fully paid shares issued on 25 May 2026. These securities were issued under an employee incentive scheme and are not subject to transfer restrictions, or will be q...
Smartgroup Director Paul Rogan Acquires Initial 12,000-Share Stake
May 22, 2026
Smartgroup Corporation director Paul Rogan has disclosed a new personal stake in the company, acquiring 12,000 ordinary shares on 21 May 2026 via an on-market trade at a total cost of $140,493.32. The shares are held through the Rogan Family Super...
Smartgroup posts record Q1 as novated leasing and EV demand accelerate
May 6, 2026
Smartgroup reported a strong start to 2026, with average monthly revenue up 8% on the prior corresponding quarter and novated leasing settlements rising 7%, while new novated leasing orders jumped 22%. The company highlighted robust demand across ...
Pinnacle Exits Substantial Holder Position in Smartgroup Corporation
Apr 16, 2026
Pinnacle Investment Management Group and its listed subsidiaries have lodged a notice stating they have ceased to be a substantial shareholder in Smartgroup Corporation, effective 13 April 2026. The change indicates Pinnacle’s aggregate voti...
Smartgroup sets 2026 AGM as in-person meeting with webcast access
Apr 15, 2026
Smartgroup Corporation has released details of its 2026 Annual General Meeting, which will be held as a physical event on 20 May 2026 at the Wesley Conference Centre in central Sydney. The company will also provide a live video webcast for shareho...
Smartgroup Director Scott Wharton Adds Shares Under Employee Plan
Apr 7, 2026
Smartgroup Corporation has disclosed a minor change in the interests of director Scott Wharton, who increased his holding through the company’s employee share plan. Wharton acquired 125 ordinary shares on market, with the cost shared equally...
Smartgroup Issues New Unquoted Performance Rights Under Employee Incentive Scheme
Mar 30, 2026
Smartgroup Corporation Ltd has notified the market of the issue of 131,948 new unquoted performance rights, dated 25 March 2026, under its employee incentive scheme. These 2026 performance rights are not intended to be quoted on the ASX, indicatin...
Smartgroup Seeks ASX Quotation for 1.67m New Shares Issued Under Employee Incentive Plan
Mar 30, 2026
Smartgroup Corporation Ltd has applied for quotation on the ASX of 1,666,664 new fully paid ordinary shares. These shares were issued on 24 March 2026 under an employee incentive scheme and will trade under the existing SIQ ticker.The move expands...
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.