Smartgroup Corporation Ltd (SIQ) AI Stock Analysis

• Market Cap: AU$1.22B
• Dividend Yield: 5.51%
• Average Volume (3M): 457.95K
• Price to Earnings (P/E): 14.7
• Beta (1Y): 0.71
• Revenue Growth: 11.64%
• EPS Growth: 18.08%
• Country: AU
• Employees: 870
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 0.31
• Shares Outstanding: 135,605,550
• 10 Day Avg. Volume: 530,152
• 30 Day Avg. Volume: 457,947
• PEG Ratio: 2.89
• Price to Book (P/B): 4.28
• Price to Sales (P/S): 3.60
• P/FCF Ratio: 10.78
• 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: AU$9.83
• Price Target Upside: 9.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 0.64
• Revenue Forecast (FY): AU$344.23M

• Rating: 75 Outperform
• Price Target: AU$10.00 ▲(11.23% Upside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 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

High and Durable Profitability

Sustained high EBITDA margins (~40%+) indicate structural operating leverage in Smartgroup’s administration and leasing model. Persistent mid‑40s margin ambition and demonstrated margin expansion imply strong unit economics and long‑term profitability resilience across cycles.

Scale and Market Position

Rapid growth in active packages and leases shows expanding distribution and sticky customer relationships through employer channels. Scale raises barriers to entry, improves unit economics, and supports cross‑sell opportunities that underpin durable revenue growth and competitive advantage.

Strong Cash Generation and Conservative Net Debt

Consistent cash conversion above 100% and low reported net leverage provide financial flexibility to fund technology investment, dividends and bolt‑on initiatives. High cash conversion signals earnings quality and supports sustained capital returns without overly stressing the balance sheet.

Negative Factors

Rising Leverage Trend

A multi‑year increase in leverage reduces balance sheet flexibility and heightens sensitivity to adverse shocks. If economic or demand conditions soften, elevated debt levels could constrain investment, increase financing costs, and limit the firm's ability to deploy capital conservatively over the medium term.

Free Cash Flow Volatility

Large swings in free cash flow, despite supportive operating cash, indicate working capital or investment timing risks. Volatility can impair predictable reinvestment, dividend sustainability or buyback capacity, making capital allocation outcomes more uncertain over the next several quarters.

Policy-Driven Demand Exposure

Meaningful exposure to government EV incentives creates structural demand risk for novated leasing volumes and associated margins. Policy reversals or extended reviews can depress order flows and increase revenue variability, challenging medium‑term planning and margin targets in vehicle financing segments.

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 outsourced salary packaging services, novated leasing, and outsourced payroll services. The VS segment provides end-to-end fleet management services. The SDGS segment offers salary packaging software solutions; markets salary packaging debit cards; and distributes vehicle insurances and workforce management software to the healthcare industry. It serves community and charity workers in not-for-profit organizations; teachers, administrators, and support personnel in the education industry; nurses, clinicians, and auxiliary staff in the health industry; government sector; and corporate organizations. Smartgroup Corporation Ltd was founded in 1999 and is headquartered in Sydney, Australia.

How the Company Makes Money

Smartgroup generates revenue primarily through its salary packaging and novated leasing services. The company charges employers and employees a fee for managing these services, which includes administrative costs and service fees. Additionally, Smartgroup earns revenue from fleet management services, where it oversees the procurement and maintenance of vehicles for clients. The company also benefits from partnerships with various organizations, allowing them to expand their service offerings and client base. Significant factors contributing to its earnings include the growing demand for employee benefits programs, increased awareness of salary packaging advantages, and strategic collaborations with other businesses in the human resources sector.

Smartgroup Corporation Ltd Financial Statement Overview

Summary

Strong profitability and returns underpin the profile (consistently high margins and solid ROE), but the balance sheet shows a multi-year leverage increase and cash flow is less consistent, highlighted by a sharp free-cash-flow decline in 2025.

Income Statement

Revenue has grown steadily from 2021–2025, accelerating in 2025 (up ~4.1% year over year after ~0.2% in 2024). Profitability is a key strength: net margins have been consistently strong around the mid‑20% range, and operating profitability remains high with EBITDA margin staying roughly ~40%+. A watch-out is some variability in gross margin (notably an unusually high 2024 gross margin figure versus other years), but overall earnings quality and consistency look solid.

Balance Sheet

Leverage appears manageable: debt-to-equity remains moderate (rising from ~0.14 in 2020–2021 to ~0.35 in 2025), suggesting increased borrowing but not an outsized balance-sheet risk. Shareholders’ equity has expanded over time, and returns on equity are strong (roughly mid‑20% to high‑20% in recent years), indicating efficient capital use. The main weakness is the clear upward trend in leverage since 2021, which reduces flexibility if operating conditions soften.

Cash Flow

Cash generation is generally supportive of earnings: free cash flow has often tracked net income well (free cash flow running roughly ~0.64x–0.97x of net income across the period; ~0.89x in 2025). However, volatility is the key issue—free cash flow dropped sharply in 2025 (down ~41.8% year over year) despite higher operating cash flow, pointing to heavier cash outflows (e.g., working capital or investment needs). Overall cash flow quality is decent, but the swing in free cash flow lowers confidence versus the stronger income statement profile.

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

• Technical Analysis Sentiment: Positive
• Last Price: 8.99
• 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:SIQ, the sentiment is Positive. The current price of 8.99 is above the 20-day moving average (MA) of 8.52, above the 50-day MA of 8.74, and above the 200-day MA of 8.16, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 60.58 is Neutral, neither overbought nor oversold. The STOCH value of 90.49 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CUP	76 Outperform	AU$186.01M	13.14	8.06%	4.11%	27.05%	520.93%
SIQ	75 Outperform	AU$1.22B	14.69	31.30%	5.51%	11.64%	18.08%
IPH	75 Outperform	AU$935.61M	13.03	10.32%	10.58%	16.61%	3.07%
MAD	73 Outperform	AU$1.66B	26.87	30.67%	1.14%	12.62%	12.46%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KPG	59 Neutral	AU$255.35M	84.43	13.37%	0.11%	24.47%	21.28%
STG	49 Neutral	AU$21.23M	-3.83	-23.42%	―	-13.52%	7.82%

Smartgroup Corporation Ltd Corporate Events

Smartgroup lodges updated ASX corporate governance statement and Appendix 4G

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 the board. The company states it has complied in full with key ASX Corporate Governance Council recommendations, including maintaining a published board charter, undertaking checks on directors and executives, and ensuring the company secretary reports directly to the board, signalling a continued emphasis on transparent and accountable governance practices.

By providing a detailed key to its governance disclosures and hosting its corporate governance materials on its investor website, Smartgroup aims to make it easier for shareholders and regulators to locate and verify its compliance information. This approach reinforces the company’s alignment with ASX listing requirements and supports stakeholder confidence in its oversight structures, although no changes to business operations or strategy are disclosed in the filing.

The most recent analyst rating on (AU:SIQ) stock is a Buy with a A$10.50 price target. To see the full list of analyst forecasts on Smartgroup Corporation Ltd stock, see the AU:SIQ Stock Forecast page.

Smartgroup Links 2025 Results Briefing With Cultural and Social Focus

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 company’s continued emphasis on cultural engagement and acknowledgment of First Nations custodianship, underscoring a broader commitment to social responsibility alongside its financial performance and investor communications.

The presentation integrates an Artist Statement by Jade Kennedy, reflecting themes of caring for Country and the enduring connection of First Peoples to land, which Smartgroup aligns with its corporate narrative. This cultural framing suggests the company is seeking to strengthen its social license and stakeholder relationships, potentially enhancing its brand and positioning with investors, clients, and the wider community.

The most recent analyst rating on (AU:SIQ) stock is a Buy with a A$10.50 price target. To see the full list of analyst forecasts on Smartgroup Corporation Ltd stock, see the AU:SIQ Stock Forecast page.

Smartgroup lifts earnings and margins on record leasing and packaging demand

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 operating cash flow, low net debt of 0.3x EBITDA and record customer numbers in salary packaging, novated leasing and fleet allowed the company to declare fully franked ordinary and special dividends totalling 53 cents per share, equal to 90% of NPATA.

Customer growth was underpinned by enhanced digital marketing, service improvements and technology investment, with active salary packaging customers reaching 491,000 and novated leasing customers 85,300 by year-end. Novated leasing demand remained robust, including a sharp rise in battery electric vehicle orders, while internal combustion engine vehicles still accounted for more than half of new car leases, underscoring Smartgroup’s balanced exposure as government policy on electric vehicles continues to evolve.

The most recent analyst rating on (AU:SIQ) stock is a Buy with a A$10.50 price target. To see the full list of analyst forecasts on Smartgroup Corporation Ltd stock, see the AU:SIQ Stock Forecast page.

Smartgroup declares interim dividend of AUD 0.335 per share

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-dividend on 5 March and payment scheduled for 20 March 2026.

The announcement signals an ongoing return of capital to shareholders, reflecting the company’s capacity to distribute earnings from its financial year 2025 performance. The timing and size of the payment will be closely watched by investors as an indicator of Smartgroup’s cash generation, capital management discipline and confidence in its operating outlook.

The most recent analyst rating on (AU:SIQ) stock is a Buy with a A$10.50 price target. To see the full list of analyst forecasts on Smartgroup Corporation Ltd stock, see the AU:SIQ Stock Forecast page.

Smartgroup lifts 2025 profit and declares special dividend

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 $79.4 million, reflecting continued growth in its core outsourced administration and financial services operations.

The board has determined a fully franked final ordinary dividend of 21.5 cents per share and a fully franked special dividend of 12 cents per share, in addition to the previously paid 19.5 cent interim dividend. While net tangible assets per share remain negative due to the company’s capital and asset structure, the increased earnings and additional special dividend signal confidence in cash generation and underlying business performance.

The most recent analyst rating on (AU:SIQ) stock is a Buy with a A$10.50 price target. To see the full list of analyst forecasts on Smartgroup Corporation Ltd stock, see the AU:SIQ Stock Forecast page.

Smartgroup Sets Date for 2025 Full-Year Results and Investor Briefing

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 Managing Director and CEO Scott Wharton and CFO Jason King. The webcast, which will also be made available in the investor section of the company’s website, underscores Smartgroup’s focus on maintaining transparency and timely engagement with investors ahead of a potentially market-sensitive earnings update.

The most recent analyst rating on (AU:SIQ) stock is a Buy with a A$10.50 price target. To see the full list of analyst forecasts on Smartgroup Corporation Ltd stock, see the AU:SIQ Stock Forecast page.

Mitsubishi UFJ Financial Group Ceases to Be Substantial Holder in Smartgroup

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 a series of small purchases of Smartgroup fully paid ordinary shares by an entity controlled by Morgan Stanley on 14 January 2026, which collectively altered Mitsubishi UFJ Financial Group’s voting power and triggered the requirement to disclose its changed status; the move signals a shift in Smartgroup’s share register that may slightly reconfigure the balance of institutional ownership but does not, on its face, indicate any operational changes for the company.

The most recent analyst rating on (AU:SIQ) stock is a Buy with a A$10.50 price target. To see the full list of analyst forecasts on Smartgroup Corporation Ltd stock, see the AU:SIQ Stock Forecast page.

First Sentier Group Ceases to Be Substantial Holder in Smartgroup

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 2026, under Australia’s Corporations Act disclosure regime. The change in status reduces the concentration of institutional ownership in Smartgroup’s register and may signal a reshaping of its shareholder base, potentially affecting perceptions of institutional support and trading dynamics, though no specific transaction details or strategic rationale were disclosed in the notice.

The most recent analyst rating on (AU:SIQ) stock is a Buy with a A$10.50 price target. To see the full list of analyst forecasts on Smartgroup Corporation Ltd stock, see the AU:SIQ Stock Forecast page.

Mitsubishi UFJ Exits Substantial Holder Position in Smartgroup

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 a series of transactions in Smartgroup fully paid ordinary shares during August 2025, executed through entities controlled by First Sentier Group Limited and Morgan Stanley, which have reduced Mitsubishi UFJ’s relevant interest below the substantial holding threshold, signalling a shift in the company’s institutional shareholder base and potentially altering the balance of influence among major investors.

The most recent analyst rating on (AU:SIQ) stock is a Buy with a A$10.00 price target. To see the full list of analyst forecasts on Smartgroup Corporation Ltd stock, see the AU:SIQ Stock Forecast page.

Smartgroup Announces Change in Substantial Holding Status

Smartgroup Corporation Ltd has announced a change in its substantial holding status, as State Street Corporation and its subsidiaries have ceased to be substantial holders as of December 9, 2025. This change may impact the company’s shareholder structure and could influence its market dynamics, though specific implications for stakeholders were not detailed in the release.

The most recent analyst rating on (AU:SIQ) stock is a Buy with a A$10.00 price target. To see the full list of analyst forecasts on Smartgroup Corporation Ltd stock, see the AU:SIQ Stock Forecast page.

Lennox Capital Partners Ceases Substantial Holding in Smartgroup

Lennox Capital Partners Pty Limited has announced that it has ceased to be a substantial holder in Smartgroup Corporation Ltd. This change in holding could impact Smartgroup’s shareholder composition and potentially influence its market positioning, as substantial holders often have significant voting power and influence over company decisions.

The most recent analyst rating on (AU:SIQ) stock is a Hold with a A$9.00 price target. To see the full list of analyst forecasts on Smartgroup Corporation Ltd stock, see the AU:SIQ Stock Forecast page.