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Smartgroup Corporation Ltd
(Sydney:SIQ)
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Rating:76Outperform
Price Target:
AU$14.50
▲(11.80% Upside)
Action:Reiterated
Date:08/27/26
The score is driven primarily by strong underlying financial performance and a constructive earnings update emphasizing growth, cash generation, and capital returns, partially offset by cash-flow volatility and investment-driven near-term margin/headline earnings pressures. Technical signals are neutral and valuation is reasonable, together providing moderate support rather than a strong tailwind.
Positive Factors
Broad-based revenue and customer growth
Growth across revenue, salary packages and novated leases indicates expanding customer participation and platform usage. A larger administered base can support recurring fee income, operating leverage and stronger competitive positioning over the next several years.
Negative Factors
Volatile free cash flow
The sharp free-cash-flow decline shows that reported earnings do not always translate consistently into distributable cash. Working-capital movements or investment needs could constrain flexibility and make funding shareholder returns less predictable.
Read all positive and negative factors
Positive Factors
Negative Factors
Broad-based revenue and customer growth
Growth across revenue, salary packages and novated leases indicates expanding customer participation and platform usage. A larger administered base can support recurring fee income, operating leverage and stronger competitive positioning over the next several years.
Read all positive factors
Smartgroup Corporation Ltd (SIQ) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$1.59B
Dividend Yield4.22%
Average Volume (3M)554.48K
Price to Earnings (P/E)17.7
Beta (1Y)0.83
Revenue Growth10.49%
EPS Growth5.31%
CountryAU
Employees909
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.65
Shares Outstanding138,151,640
10 Day Avg. Volume841,589
30 Day Avg. Volume554,475
Financial Highlights & Ratios
PEG Ratio2.90
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$12.01Price Target Upside-7.43% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.66
Revenue Forecast (FY)AU$359.22M
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 primarily by administering salary packaging and novated leasing arrangements for employer clients and their employees. Key revenue streams typically include: (1) administration and service fees for managing salary packaging ...
Smartgroup Corporation Ltd Earnings Call Summary
Earnings Call Date:Aug 26, 2026
(Q2-2026)
| Next Earnings Date:Feb 24, 2027
Earnings Call Sentiment Positive
The call highlights strong, broad‑based growth across customers and product lines, record novated leasing settlements, significant EV adoption, improved efficiency metrics and robust cash generation enabling dividends and a buyback. These positives are tempered by elevated operating and technology investments, higher depreciation from capitalized IT, some yield variability versus the immediate prior half, and dependency on favorable market tailwinds. Management is focused on executing a multi‑year transformation with an explicit aim of mid‑40s EBITDA margin by 2027, indicating confidence in longer‑term upside despite near‑term investment‑related headwinds.Positive Updates
Record Financial Results
Revenue increased 13% to $179.5 million, EBITDA grew 16% to $73.8 million, EBITDA margin improved to 41% (up 1 ppt), NPATA rose 11% to $42.4 million, and return on equity was 31%.
Negative Updates
Elevated Operating Expenses
Total operating expenses increased 12% to $100.6 million; staff costs rose 10% and non‑staff costs rose 18%, driven by marketing, lead generation and technology investments.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Financial Results
Revenue increased 13% to $179.5 million, EBITDA grew 16% to $73.8 million, EBITDA margin improved to 41% (up 1 ppt), NPATA rose 11% to $42.4 million, and return on equity was 31%.
Read all positive updates
Company Guidance
The company reiterated guidance for sustained investment and margin improvement, targeting an EBITDA margin in the mid-40s during 2027 while continuing elevated technology investment (2026 tech CapEx guided to $13–15m; $6.9m capitalized in H1) and returning capital (interim fully‑franked dividend $0.215/share = 70% of NPATA; dividend policy 60–70% of NPATA; on‑market buyback up to $20m). Management flagged continued strong demand and conversion (H1 revenue +13% to $179.5m; net revenue +14% to $174.4m; EBITDA $73.8m +16% with 41% margin; NPATA $42.4m +11%; cash conversion 120% of NPATA; ROE last 12 months 31%), operational scale and efficiency gains (active salary packages 518,000 +7%; novated leases 91,600 +15%; fleet 36,200 vehicles +12%; new leased vehicle orders +34%; settlements +17%; pipeline $22.5m; BEV new orders +162% and 68% share), a conservative balance sheet (net debt $35.4m, 0.2x leverage) and multi‑year tech and cloud goals (85% cloud compute now, from 45% end‑2025, targeting 100% by 2028) to underpin the mid‑40s margin objective.Smartgroup Corporation Ltd Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
78
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 349.67M | 329.31M | 305.84M | 251.61M | 224.70M | 221.80M |
| Gross Profit | 185.60M | 175.15M | 291.90M | 130.31M | 122.07M | 122.32M |
| EBITDA | 147.26M | 137.16M | 123.69M | 99.91M | 93.58M | 99.28M |
| Net Income | 83.72M | 79.44M | 75.60M | 61.92M | 58.78M | 58.81M |
Balance Sheet | ||||||
| Total Assets | 694.93M | 714.40M | 653.36M | 417.53M | 405.84M | 408.26M |
| Cash, Cash Equivalents and Short-Term Investments | 293.38M | 312.70M | 34.65M | 32.79M | 62.73M | 32.45M |
| Total Debt | 88.61M | 97.16M | 84.36M | 72.30M | 64.39M | 38.09M |
| Total Liabilities | 412.81M | 437.33M | 395.07M | 173.71M | 165.50M | 142.03M |
| Stockholders Equity | 282.12M | 277.06M | 258.28M | 243.82M | 240.34M | 266.23M |
Cash Flow | ||||||
| Free Cash Flow | 109.06M | 110.08M | 49.48M | 49.21M | 52.04M | 61.48M |
| Operating Cash Flow | 122.10M | 123.68M | 77.54M | 67.23M | 66.97M | 69.40M |
| Investing Cash Flow | -23.19M | -22.85M | -22.84M | -8.69M | -14.93M | -7.75M |
| Financing Cash Flow | -83.48M | -67.85M | -52.85M | -50.43M | -62.96M | -63.48M |
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$1.59B | 17.69 | 29.94% | 4.22% | 10.49% | 5.31% | |
70 Outperform | AU$321.12M | 17.52 | 10.76% | 3.33% | 15.47% | 60.30% | |
64 Neutral | AU$229.09M | 64.87 | 11.79% | 0.91% | 18.25% | 2.90% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | AU$65.38M | -33.72 | -8.93% | ― | -6.17% | -191.49% |
* Industrials Sector Average
AU:SIQ
Smartgroup Corporation Ltd
11.50
3.13
37.40%
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0.15
-0.10
-39.58%
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Countplus Limited
1.50
0.50
50.15%
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Kelly Partners Group Holdings Ltd.
5.06
-5.69
-52.93%
Smartgroup Corporation Ltd Corporate Events
Smartgroup Highlights HY 2026 Results and Cultural Commitment
Aug 26, 2026
Smartgroup Corporation Ltd has released its HY 2026 investor presentation outlining its half‑year financial results and operational performance. The document, presented by Managing Director and CEO Scott Wharton and CFO Jason King, is positi...
Smartgroup posts record H1 2026 profits as novated leasing and EV demand surge
Aug 26, 2026
Smartgroup reported record first-half 2026 results, with revenue rising 13% to $179.5 million and operating EBITDA up 16% to $73.8 million, expanding its margin to 41%. NPATA grew 11% to $42.4 million, supported by strong operating cash flow, low ...
Smartgroup Declares Interim Dividend of AUD 0.215 Per Share
Aug 26, 2026
Smartgroup Corporation Ltd, listed on the ASX under ticker SIQ, provides financial and administrative services such as salary packaging and employee benefits management to institutional and government clients. Its ordinary fully paid shares are a ...
State Street exits substantial holder position in Smartgroup Corporation
Aug 24, 2026
State Street Corporation, through several global asset management subsidiaries, has lodged a notice that it has ceased to be a substantial holder in Smartgroup Corporation Ltd as at 20 August 2026. The filing, made under section 671B of the Corpor...
Smartgroup Adds Virgin Australia Executive Libby Minogue to Board
Aug 6, 2026
Smartgroup Corporation has strengthened its board by appointing marketing and digital specialist Elizabeth (Libby) Minogue as an independent non-executive director, effective 1 September 2026. Minogue currently serves as Chief Marketing and Sustai...
Smartgroup Sets Date for Half-Year 2026 Results and Investor Briefing
Jul 27, 2026
Smartgroup Corporation Ltd has scheduled the release of its half-year results for the period ended 30 June 2026 on 27 August 2026, before the ASX market opens. The timing underscores the importance of the update for investors who rely on Smartgrou...
State Street exits substantial holding in Smartgroup
Jun 23, 2026
State Street Corporation, through several subsidiaries including State Street Global Advisors and State Street Bank and Trust Company, has notified Smartgroup Corporation Ltd that it has ceased to be a substantial shareholder as of 19 June 2026. T...
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...
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.