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a2 Milk Company
(ATM)
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Rating:69Neutral
Price Target:
$9.00
▲(8.96% Upside)
Action:N/A
Date:10/05/26
The score is supported primarily by strong profitability and an exceptionally conservative balance sheet, plus a high dividend yield. Offsetting these positives are weakened recent cash flow/cash conversion, and earnings-call guidance indicating near-term margin pressure and a second-half-weighted recovery following supply-chain disruption impacts. Technical signals are neutral, offering limited confirmation of momentum.
Positive Factors
Strong profitability and margins
Improving gross and net margins indicate stronger profit capture across the branded portfolio and support reinvestment in innovation, marketing and distribution. Healthy operating profitability also provides resilience as the company manages product mix changes and rebuilds China demand.
Negative Factors
China-label infant formula disruption and share loss
The disruption caused lost availability and consumer switching to rival brands, creating a durable customer-retention challenge even after supply normalizes. Recovery depends on regaining former users and recruiting new ones, making China infant-formula earnings execution-sensitive.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong profitability and margins
Improving gross and net margins indicate stronger profit capture across the branded portfolio and support reinvestment in innovation, marketing and distribution. Healthy operating profitability also provides resilience as the company manages product mix changes and rebuilds China demand.
Read all positive factors
a2 Milk Company (ATM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.99B
Dividend Yield7.73%
Average Volume (3M)321.61K
Price to Earnings (P/E)25.9
Beta (1Y)0.87
Revenue Growth3.84%
EPS Growth6.53%
CountryNZ
Employees485
SectorConsumer Defensive
Sector Strength42
IndustryPackaged Foods
Share Statistics
EPS (TTM)0.30
Shares Outstanding728,055,850
10 Day Avg. Volume261,521
30 Day Avg. Volume321,608
Financial Highlights & Ratios
PEG Ratio4.27
Price to Book (P/B)6.18
Price to Sales (P/S)3.36
P/FCF Ratio111.21
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.58Price Target Upside16.03% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)0.3
Revenue Forecast (FY)$2.08B
a2 Milk Company Business Overview & Revenue Model
Company Description
The a2 Milk Company Limited, along with its affiliated entities, distributes A2 protein-branded dairy products and related merchandise across key international markets including Australia, New Zealand, China, various other Asian territories, and t...
How the Company Makes Money
ATM makes money primarily by selling branded dairy and nutrition products, with revenue largely driven by (1) infant nutrition and (2) liquid milk and other dairy products. Its core model is a branded, premium-positioned consumer goods strategy: i...
a2 Milk Company Earnings Call Summary
Earnings Call Date:Aug 16, 2026
(Q4-2026)
| Next Earnings Date:Feb 22, 2027
Earnings Call Sentiment Neutral
The call presented a mixed picture: the company delivered strong top-line growth (+12.4%), solid underlying EBITDA and multiple growth vectors (U.S., ANZ, other nutritionals, innovation), completed strategic supply-chain moves (a2 Pokeno) and returned significant capital to shareholders. However, a material fourth-quarter supply-chain disruption severely impacted China label IMF sales and in-market availability, pressured reported margins and required elevated marketing and recovery spend. Management outlined a clear recovery plan and expects FY'27 growth weighted to the second half, but near-term margin and sales phasing remain challenged.Positive Updates
Revenue Growth
Group revenue increased 12.4% year-on-year to approximately $1.97 billion (FY'26), driven by broad-based growth across geographies and product categories.
Negative Updates
Material Supply Chain Disruption Impacting China IMF
Fourth-quarter supply chain disruption materially impacted China label IMF product availability, leading to a significant hit to in-market availability, higher supply-chain costs and second-half sales and earnings; causes included freight issues, Synlait production backlog, extended release times and additional customs/testing requirements.
Read all updates
Q4-2026 Updates
Positive
Negative
Revenue Growth
Group revenue increased 12.4% year-on-year to approximately $1.97 billion (FY'26), driven by broad-based growth across geographies and product categories.
Read all positive updates
Company Guidance
The company guided FY27 to mid‑single‑digit revenue growth with first‑half revenue broadly in line with FY26 and group revenue and EBITDA materially weighted to the second half; it expects EBITDA margin of approximately 15% (versus FY25 EBITDA margin of 16.6% and FY26 underlying margin of 15.6%), with most of the ~1.6 percentage‑point year‑on‑year decline driven by gross‑margin headwinds (mix dilution as IMF is broadly flat while liquid milk and other nutritionals grow, plus higher milk/ingredient COGS) and a higher marketing reinvestment profile (phased into H1, roughly ~2 percentage points higher reinvestment in H1), IMF sales to be impacted by Q4 supply‑chain flow‑on effects with a gradual recovery over the year supported by increased marketing, and a2 Pokeno expected to reach EBITDA breakeven in FY27.a2 Milk Company Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
86
Very Positive
Cash Flow
52
Neutral
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.97B | 1.90B | 1.67B | 1.59B | 1.44B |
| Gross Profit | 940.38M | 875.15M | 766.63M | 739.16M | 663.52M |
| EBITDA | 304.05M | 318.06M | 273.34M | 219.42M | 196.34M |
| Net Income | 216.70M | 202.89M | 167.58M | 155.64M | 122.62M |
Balance Sheet | |||||
| Total Assets | 1.96B | 1.94B | 1.73B | 1.61B | 1.72B |
| Cash, Cash Equivalents and Short-Term Investments | 784.47M | 1.10B | 968.94M | 802.23M | 887.31M |
| Total Debt | 24.31M | 100.74M | 66.22M | 101.53M | 124.35M |
| Total Liabilities | 887.99M | 511.37M | 478.10M | 462.21M | 521.89M |
| Stockholders Equity | 1.07B | 1.45B | 1.27B | 1.15B | 1.18B |
Cash Flow | |||||
| Free Cash Flow | 59.67M | 197.51M | 235.22M | 101.21M | 198.86M |
| Operating Cash Flow | 133.14M | 201.48M | 255.74M | 111.28M | 203.80M |
| Investing Cash Flow | 148.84M | -92.28M | -37.14M | -13.94M | -669.99M |
| Financing Cash Flow | -211.51M | -28.27M | -49.81M | -178.43M | 9.64M |
a2 Milk Company Technical Analysis
Negative
8.26
Price Trends
8.20
Negative
7.83
Positive
8.75
Negative
Market Momentum
0.01
Positive
47.79
Neutral
26.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NZ:ATM, the sentiment is Negative. The current price of 8.26 is above the 20-day moving average (MA) of 8.26, above the 50-day MA of 8.20, and below the 200-day MA of 8.75, indicating a bearish trend. The MACD of 0.01 indicates Positive momentum. The RSI at 47.79 is Neutral, neither overbought nor oversold. The STOCH value of 26.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NZ:ATM.
a2 Milk Company Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $162.03M | 7.42 | ― | 9.76% | 6.67% | -30.47% | |
69 Neutral | $5.99B | 25.89 | 17.63% | 7.73% | 3.84% | 6.53% | |
69 Neutral | $974.75M | 11.21 | ― | 4.09% | 100.12% | 60.22% | |
67 Neutral | $99.98M | 7.56 | 9.98% | 1.90% | 10.67% | ― | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
52 Neutral | $268.37M | 22.18 | ― | 6.67% | -17.18% | 196.29% | |
46 Neutral | $244.30M | -3.62 | -10.58% | ― | -7.94% | -95.77% |
* Consumer Defensive Sector Average
NZ:ATM
a2 Milk Company
8.01
-1.38
-14.68%
NZ:CVT
Comvita
0.75
-0.01
-1.57%
NZ:SML
Synlait Milk Ltd.
0.42
-0.36
-46.15%
NZ:LIC
Livestock Improvement Corporation Ltd
1.13
0.25
28.26%
NZ:SCL
Scales Corp. Ltd.
6.50
1.08
19.99%
NZ:TGG
T&G Global Limited
2.22
0.22
11.00%
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.