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Kip McGrath Education Centres Limited (KME) AI Stock Analysis

AU:KME

Kip McGrath Education Centres Limited

(ASX:KME)

Select Model
Rating:72Outperform
Price Target:AUD 0.81â–²(13.38% Upside)
Action:upgraded
Date:08/19/26

The score is driven primarily by solid financial recovery, healthy margins, improving returns and strong cash generation, complemented by a clear price uptrend, while overbought technical conditions, volatility in earnings and cash flows, and only moderately attractive valuation keep the rating in the low 70s rather than at the top of the range.

Positive Factors
Strong Cash GenerationRobust operating and free cash flow supports internal funding, franchisee support and business resilience. Free cash flow was close to net income, indicating solid earnings conversion and reducing reliance on external financing.
Negative Factors
Revenue ContractionThe decline indicates weaker top-line momentum and may reflect pressure on enrolments, pricing or network activity. Sustained revenue softness would limit royalty growth and reduce operating leverage across the education services platform.

Kip McGrath Education Centres Limited (KME) vs. iShares MSCI Australia ETF (EWA)

-30%-20%-10%0%10%20%30%40%50%AU:KME+34.72%EWA+13.51%Dec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26
Market Cap
AUD 37.27M
Dividend Yield
9.86%
Average Volume (3M)
199.72K
Price to Earnings (P/E)
15.6
Beta (1Y)
0.78
Revenue Growth
-4.20%
EPS Growth
―
Country
Australia
Employees
25
Sector
Consumer Defensive
Sector Strength
62
Industry
Education & Training Services

Kip McGrath Education Centres Limited Business Overview & Revenue Model

Company Description

Kip McGrath Education Centres Limited is a global provider of English and Mathematics educational support, with operations spanning Australia, New Zealand, the United Kingdom, and numerous other international markets. The company specializes in offer...

How the Company Makes Money

KME makes money primarily through a franchising model and related education service fees. Key revenue streams include: (1) Franchise fees and royalties: Franchisees pay ongoing fees/royalties to use the Kip McGrath brand, operating system, and curric...

Kip McGrath Education Centres Limited Financial Statement Overview

Summary

Recovering profitability, strong margins, solid cash generation and low leverage support a healthy financial profile, but recent revenue decline, volatile earnings and a shrinking equity base temper the strength.

Income Statement

76Positive

Balance Sheet

69Positive

Cash Flow

74Positive
Financial statement breakdown
BreakdownTTMJun 2026Jun 2025Jun 2024Jun 2023Jun 2022
Income Statement
Total Revenue30.00M30.00M31.41M28.85M26.65M24.63M
Gross Profit12.41M12.41M17.37M10.63M10.18M9.67M
EBITDA7.71M7.71M7.98M7.10M6.71M6.21M
Net Income2.52M2.52M-5.32M1.32M1.92M1.88M
Balance Sheet
Total Assets26.74M26.74M30.47M34.88M37.11M36.38M
Cash, Cash Equivalents and Short-Term Investments6.90M6.90M6.93M5.40M9.15M7.63M
Total Debt2.17M2.17M3.11M3.69M3.63M3.15M
Total Liabilities9.08M9.08M11.84M11.18M14.03M14.45M
Stockholders Equity17.66M17.66M18.64M23.70M23.08M21.92M
Cash Flow
Free Cash Flow6.82M6.82M5.93M-1.57M2.81M277.00K
Operating Cash Flow6.99M6.99M6.26M2.86M6.37M5.05M
Investing Cash Flow-1.27M-1.27M-1.96M-4.44M-3.57M-6.96M
Financing Cash Flow-4.84M-4.84M-2.77M-2.18M-1.28M-1.04M

Kip McGrath Education Centres Limited Technical Analysis

Technical Analysis SentimentPositive
Last Price0.71

Price Trends

50DMA0.68Positive
100DMA0.60Positive
200DMA0.55Positive

Market Momentum

MACD0.01Negative
RSI55.80Neutral
STOCH34.62Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:KME, the sentiment is Positive. The current price of 0.71 is above the 20-day moving average (MA) of 0.69, above the 50-day MA of 0.68, and above the 200-day MA of 0.55, indicating a bullish trend. The MACD of 0.01 indicates Negative momentum. The RSI at 55.80 is Neutral, neither overbought nor oversold. The STOCH value of 34.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:KME.

Kip McGrath Education Centres Limited Peers Comparison

Overall Rating

UnderperformOutperform
Sector (62)

Financial Indicators

AU:KME against its peers
NameOverall RatingMarket CapP/E RatioROEDividend YieldRevenue GrowthEPS Growth
AU:KMEAU:KME72OutperformAUD 37.27M15.6013.76%9.86%-4.20%―
Sector *62Neutral$20.33B14.63-3.31%3.23%1.93%-12.26%
AU:3PLAU:3PL62NeutralAUD 85.97M8.706.79%11.17%-5.02%4425.00%
AU:EVOAU:EVO59NeutralAUD 75.35M-10.63-9.41%16.22%5.99%-145.93%
AU:NDOAU:NDO52NeutralAUD 59.00M14.773.46%34.67%1.98%-72.40%
AU:GEMAU:GEM38UnderperformAUD 77.16M-0.21-72.04%―-10.83%-649.32%

* Consumer Defensive Sector Average

Performance Comparison

-50%0%AU:KMEAU:EVOAU:GEMAU:3PLAU:NDODec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26
AU:KME and its peers over the selected period
Show on chartTickerCompany NamePriceChange% Change
AU:KMEKip McGrath Education Centres Limited0.710.1834.72%
AU:EVOEvolve Education Group Ltd0.37-0.23-38.13%
AU:GEMG8 Education Limited0.10-0.71-87.58%
AU:3PL3P Learning Ltd.0.32-0.23-42.10%
AU:NDONido Education Limited0.26-0.37-58.86%

Kip McGrath Education Centres Limited Corporate Events

Crimson Consulting Completes Dispatch of Takeover Documents for Kip McGrath

Aug 17, 2026

Crimson Consulting Australia Pty Ltd has completed the dispatch of its bidder’s statement for a takeover offer to acquire all Kip McGrath Education Centres Limited securities it does not already own. The offer documents, dated 30 July and 7 Aug...

Crimson Consulting Launches $0.73-a-Share Takeover Bid for Kip McGrath

Aug 17, 2026

Crimson Consulting Australia Pty Ltd, a wholly owned subsidiary of New Zealand-based Crimson Consulting Limited, has formally commenced the dispatch of its bidder’s statement for an off-market takeover offer for all shares in Kip McGrath Educat...

Kip McGrath Builds on Recurring Franchise Revenue and Tech-Led Growth

Aug 11, 2026

Kip McGrath Education Centres reported solid growth in FY26, with revenue rising to $30.1 million at an approximate 9% compound annual growth rate over five years and EBITDA reaching $7.5 million, representing a 25% margin. The business is increasing...

Kip McGrath Swings to Profit Despite Revenue Decline

Aug 10, 2026

Kip McGrath Education Centres Limited reported a 4.3% decline in revenue from continuing operations to $30.1 million for the year to 30 June 2026, yet profit after tax from continuing operations rose 2.1% to $2.34 million and overall profit attributa...

Kip McGrath Appoints Advisers to Assess Unsolicited Takeover Approach

Aug 3, 2026

Kip McGrath Education Centres Limited has appointed Houlihan Lokey as financial adviser and Norton Rose Fulbright as legal adviser to help evaluate an unsolicited takeover approach from Crimson Consulting Australia. The board is assessing whether the...

Kip McGrath Confirms Unsolicited Off-Market Takeover Approach

Jul 30, 2026

Kip McGrath Education Centres Limited has disclosed that it received an unsolicited off-market takeover approach from Crimson Consulting Australia Pty Ltd, with the proposal lodged simultaneously with the ASX and ASIC. The board has stressed that sha...

Crimson Consulting Launches $0.73-a-Share Takeover Bid for Kip McGrath

Jul 30, 2026

Crimson Consulting Australia Pty Ltd, a wholly owned subsidiary of New Zealand-based Crimson Consulting Limited, has formally lodged its bidder’s statement for an off-market takeover offer for all shares in Kip McGrath Education Centres Limited...

Kip McGrath Reports Lapse of Performance Rights

Jul 14, 2026

Kip McGrath Education Centres Limited has reported the lapse of 182,068 performance rights listed under ASX code KMEAU. The rights ceased on July 2, 2026 after the conditional requirements attached to these securities were not met or became incapable...

Kip McGrath to Issue 150,736 Unquoted Performance Rights Under Incentive Scheme

Jul 13, 2026

Kip McGrath Education Centres Limited has notified the market of the planned issue of 150,736 unquoted performance rights under its employee incentive scheme. These securities, coded KMEAU, will be subject to transfer restrictions and are scheduled t...

Kip McGrath Issues New Performance Rights Under Employee Incentive Scheme

Jul 9, 2026

Kip McGrath Education Centres Limited has notified the market of the issue of 33,151 unquoted performance rights under its employee incentive scheme, dated 8 July 2026. These securities are subject to transfer restrictions and will not be quoted on t...

Kip McGrath Director Damian Banks Increases Indirect Shareholding

Jul 1, 2026

Kip McGrath Education Centres Limited has reported a change in the indirect shareholding of director Damian Banks, as disclosed to the Australian Securities Exchange. The change reflects an on-market purchase of additional shares held via HSBC Custod...

Kip McGrath Continues Daily On-Market Share Buy-Back

Jun 30, 2026

Kip McGrath Education Centres Limited, an ASX-listed provider of tutoring and educational support services, runs a network of centres delivering structured academic programs to school-aged learners. Its ordinary fully paid shares trade under the code...

Director Anne Bell Builds Stake in Kip McGrath Education Centres

Jun 30, 2026

Kip McGrath Education Centres Limited has disclosed a change in director Anne Bell’s interests in the company’s securities. Over three trading days in late June 2026, Bell acquired 80,000 shares via on-market trades, paying a total consid...

Kip McGrath Director Increases Indirect Shareholding

Jun 29, 2026

Kip McGrath Education Centres Limited has reported a change in director Damian Banks’ relevant interest in the company’s securities, reflecting an increase in his indirect shareholding via a superannuation structure. Following on-market p...

Kip McGrath Continues On-Market Share Buy-Back Program

Jun 25, 2026

Kip McGrath Education Centres Limited has continued its on-market share buy-back program for its ordinary fully paid shares, with a daily update noting that 42,865 shares were repurchased on the previous day. This takes the cumulative total bought ba...

Kip McGrath Director Lynne Lewis Increases Shareholding via On-Market Buy

Jun 25, 2026

Kip McGrath Education Centres Limited has reported a change in the shareholding of director Lynne Lewis, reflecting increased alignment between management and shareholders in the education services group. The disclosed transaction highlights ongoing...

Kip McGrath Reports Progress on Ongoing On-Market Share Buy-Back

Jun 24, 2026

Kip McGrath Education Centres Limited has updated the market on its ongoing on-market share buy-back of ordinary fully paid shares, confirming that a total of 4,142,092 securities had been repurchased prior to the latest trading day and a further 10,...

Kip McGrath Cancels 2.4 Million Shares in On-Market Buy-Back

May 28, 2026

Kip McGrath Education Centres Limited has cancelled 2,400,349 ordinary fully paid shares as part of an on-market share buy-back completed on May 25, 2026. The reduction in issued capital may improve key per-share metrics and signals management’...

Kip McGrath Updates Market on Progress of On‑Market Share Buy‑Back

May 26, 2026

Kip McGrath Education Centres Limited has provided an updated notification to the Australian Securities Exchange regarding its ongoing on-market share buy-back program for its ordinary fully paid shares. The latest daily report shows that a total of...

Kip McGrath Continues On-Market Share Buy-Back Program

May 24, 2026

Kip McGrath Education Centres Limited has continued its on-market share buy-back program, repurchasing 42,233 ordinary fully paid shares on the previous trading day, bringing the cumulative total bought back to 4,070,718 shares. The ongoing buy-back,...

Kip McGrath Reports Ongoing Progress in On-Market Share Buy-Back

May 22, 2026

Kip McGrath Education Centres Limited has updated the market on progress under its on-market share buy-back program for its ordinary fully paid shares. The company reported that it repurchased 72,000 shares in the previous trading day, bringing the t...

Kip McGrath Updates Market on Progress of On‑Market Share Buy‑Back

May 21, 2026

Kip McGrath Education Centres Limited has updated the market on its ongoing on‑market share buy‑back program for its ordinary fully paid shares listed under the ASX code KME. The company reported that a total of 3,930,718 shares had been...

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.

Date of analysis: Aug 19, 2026