Servcorp Limited (SRV) AI Stock Analysis

• Market Cap: AU$567.89M
• Dividend Yield: 4.96%
• Average Volume (3M): 45.01K
• Price to Earnings (P/E): 10.5
• Beta (1Y): 0.24
• Revenue Growth: 6.85%
• EPS Growth: 237.34%
• Country: AU
• Employees: 674
• Sector: Real Estate
• Sector Strength: 56
• Industry: Real Estate - Services
• EPS (TTM): 0.55
• Shares Outstanding: 98,915,390
• 10 Day Avg. Volume: 46,536
• 30 Day Avg. Volume: 45,012
• PEG Ratio: -0.42
• Price to Book (P/B): 1.55
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 2.15
• 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$6.30
• Price Target Upside: 11.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 74 Outperform
• Price Target: AU$6.50 ▲(15.04%Upside)

Servcorp Limited's strong financial performance, coupled with attractive valuation, supports a positive outlook. The bullish technical indicators further reinforce the potential for price appreciation, although caution is warranted due to high leverage and overbought conditions.

Servcorp Limited Business Overview & Revenue Model

Company Description

Servcorp Limited provides executive serviced and virtual offices, coworking and IT, communications, and secretarial services. It offers office space solutions; and virtual office services, including business address, secretary and receptionist, mail forwarding, and telephone answering services. The company also provides co-working and meeting room services. It operates in Australia, New Zealand, Southeast Asia, the United States, Europe, the Middle East, North Asia, and internationally. Servcorp Limited was founded in 1978 and is headquartered in Sydney, Australia.

How the Company Makes Money

Servcorp generates revenue primarily through renting serviced office spaces, coworking spaces, and selling virtual office packages. The company offers flexible leasing arrangements, including short-term and long-term contracts, which provide businesses with professional workspaces equipped with necessary amenities such as reception services, high-speed internet, and meeting room access. Additionally, virtual office packages allow clients to benefit from a prestigious address, mail handling, and call answering services without needing a physical office presence. These packages are popular among companies seeking a professional image without significant overhead costs. Servcorp enhances its earnings with ancillary services, including IT support, secretarial assistance, and meeting room bookings, thereby creating additional revenue streams. Strategic partnerships with technology and telecommunications providers also contribute to Servcorp's competitive edge and operational efficiency.

Servcorp Limited Financial Statement Overview

Summary

Servcorp Limited demonstrates strong profitability and cash flow generation, supported by effective cost management and operational efficiency. However, high leverage poses a significant risk.

Income Statement

Servcorp Limited shows a solid gross profit margin of 45.6% for 2024, indicating effective cost management. The net profit margin improved significantly to 12.4% from 3.8% in 2023, showcasing enhanced profitability. Revenue growth rate was 7.6%, demonstrating a positive growth trajectory. However, EBIT margin is extremely high at 84.4% due to a potential one-time gain, which may not be sustainable. EBITDA margin is 54.3%, marking healthy operational efficiency.

Balance Sheet

The debt-to-equity ratio is 1.91, indicating a high level of leverage, which could pose financial risks. Return on equity improved to 20.1%, reflecting better profitability and efficient use of equity. The equity ratio stands at 28.9%, suggesting a moderate reliance on equity financing compared to total assets. Overall, while profitability metrics are strong, the high leverage remains a concern.

Cash Flow

Free cash flow in 2024 decreased slightly by 4.0%, but the operating cash flow to net income ratio of 4.2 indicates robust cash generation relative to net income. The free cash flow to net income ratio of 3.3 suggests strong cash flow health. Despite the nominal decline in free cash flow, the company's cash flow metrics remain strong and supportive of its operations.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	326.01M	314.11M	292.72M	272.53M	270.66M	349.73M
Gross Profit	242.24M	238.05M	116.29M	106.80M	71.49M	101.93M
EBITDA	93.21M	171.02M	159.32M	159.75M	119.70M	203.84M
Net Income	53.94M	39.04M	11.07M	28.02M	22.12M	6.93M
Balance Sheet
Total Assets	698.53M	674.35M	640.97M	582.67M	619.56M	723.93M
Cash, Cash Equivalents and Short-Term Investments	118.96M	116.84M	116.35M	108.23M	104.54M	109.10M
Total Debt	0.00	371.20M	367.85M	310.78M	349.47M	414.35M
Total Liabilities	471.47M	479.74M	453.19M	384.42M	424.94M	502.97M
Stockholders Equity	227.06M	194.62M	187.78M	198.25M	194.61M	220.96M
Cash Flow
Free Cash Flow	160.44M	129.51M	134.94M	130.74M	135.81M	163.03M
Operating Cash Flow	175.85M	165.79M	155.53M	145.58M	139.65M	182.27M
Investing Cash Flow	-34.70M	-38.69M	-24.66M	-12.62M	-6.47M	-17.97M
Financing Cash Flow	-123.86M	-125.19M	-122.81M	-122.27M	-131.26M	-132.95M

Servcorp Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:SRV, the sentiment is Positive. The current price of 5.65 is above the 20-day moving average (MA) of 5.63, above the 50-day MA of 5.37, and above the 200-day MA of 5.09, indicating a bullish trend. The MACD of 0.07 indicates Positive momentum. The RSI at 62.65 is Neutral, neither overbought nor oversold. The STOCH value of 85.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:SRV.

Servcorp Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SRV	74 Outperform	AU$567.89M	10.48	25.52%	4.96%	6.85%	237.34%
Sector *	53 Neutral	$1.19B	3.25	-0.13%	8.51%	-1.86%	-126.37%
CNRAF		$7.42B	13.61	7.73%	5.04%	―	―
CTOUF		$5.93B	310.20	1.03%	1.55%	―	―
DEXSF		$4.68B	―	-9.22%	3.33%	―	―
GPTGF		$6.27B	―	-1.94%	4.84%	―	―
GOZ	61 Neutral	AU$1.79B	―	-10.45%	7.40%	2.70%	-8.39%

Servcorp Limited Corporate Events

Servcorp Limited Announces New Securities Issuance

Servcorp Limited has announced the issuance of 20,000 fully paid ordinary securities, which will be quoted on the ASX under the code SRV. This move could potentially enhance the company’s liquidity and market presence, reflecting its strategic efforts to strengthen its financial position and attract more investors.

The most recent analyst rating on (AU:SRV) stock is a Buy with a A$5.50 price target. To see the full list of analyst forecasts on Servcorp Limited stock, see the AU:SRV Stock Forecast page.

Servcorp Director Increases Stake with New Share Acquisition

Servcorp Limited announced a change in the director’s interest, with Alfred George Moufarrige acquiring an additional 15,000 ordinary shares indirectly through Sovori Pty Ltd. This acquisition, valued at $85,500, reflects a strategic move in the company’s leadership, potentially impacting its market positioning and stakeholder confidence.

The most recent analyst rating on (AU:SRV) stock is a Buy with a A$5.50 price target. To see the full list of analyst forecasts on Servcorp Limited stock, see the AU:SRV Stock Forecast page.

Servcorp Limited Issues New Employee Incentive Options

Servcorp Limited has announced the issuance of 550,000 unquoted equity securities in the form of options, set to expire on June 10, 2030, with an exercise price of $5.50. This move, part of an employee incentive scheme, reflects the company’s strategy to incentivize and retain talent, potentially impacting its operational dynamics and market positioning positively.

The most recent analyst rating on (AU:SRV) stock is a Buy with a A$5.50 price target. To see the full list of analyst forecasts on Servcorp Limited stock, see the AU:SRV Stock Forecast page.

Servcorp Limited Announces Quotation of New Securities on ASX

Servcorp Limited has announced the quotation of 207,500 ordinary fully paid securities on the Australian Securities Exchange (ASX) under the code SRV, effective from June 13, 2025. This move is part of the company’s strategy to enhance its capital structure, potentially impacting its market position and offering new opportunities for stakeholders.

The most recent analyst rating on (AU:SRV) stock is a Buy with a A$5.50 price target. To see the full list of analyst forecasts on Servcorp Limited stock, see the AU:SRV Stock Forecast page.

Servcorp Limited Announces Quotation of New Securities on ASX

Servcorp Limited has announced the quotation of 15,000 fully paid ordinary securities on the Australian Securities Exchange (ASX) as of June 6, 2025. This move is part of the company’s strategy to enhance its market presence and provide more liquidity for its shareholders, potentially impacting its operational dynamics and stakeholder interests.

The most recent analyst rating on (AU:SRV) stock is a Buy with a A$5.50 price target. To see the full list of analyst forecasts on Servcorp Limited stock, see the AU:SRV Stock Forecast page.

Servcorp Limited Announces Cessation of Securities

Servcorp Limited announced the cessation of 10,000 securities due to the lapse of conditional rights, as the conditions for these securities were not met. This announcement may impact the company’s capital structure and could have implications for stakeholders, particularly in terms of market perception and financial strategy.

The most recent analyst rating on (AU:SRV) stock is a Buy with a A$5.50 price target. To see the full list of analyst forecasts on Servcorp Limited stock, see the AU:SRV Stock Forecast page.

Servcorp Limited to Quote New Securities on ASX

Servcorp Limited has announced the issuance of 5,000 fully paid ordinary securities to be quoted on the Australian Securities Exchange (ASX) as of May 8, 2025. This move is part of the company’s strategy to enhance its capital structure, potentially strengthening its market position and providing additional resources for operational expansion.

Servcorp Director Increases Shareholding

Servcorp Limited announced a change in the director’s interest in securities, with Director Alfred George Moufarrige acquiring an additional 48,000 ordinary shares through an on-market trade. This acquisition increases his indirect shareholding, potentially signaling confidence in the company’s future performance and stability, which may positively influence stakeholder perceptions.