Australian Ethical Investment Ltd.
Australian Ethical Investment Ltd. Fundamental Analysis
Australian Ethical Investment Ltd. (AEF.AX) shows strong financial fundamentals with a PE ratio of 21.50, profit margin of 19.01%, and ROE of 55.44%. The company generates $0.1B in annual revenue with strong year-over-year growth of 18.80%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 82.8/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze AEF.AX's fundamental strength across five key dimensions:
Efficiency Score
ExcellentAEF.AX demonstrates superior asset utilization.
Valuation Score
ExcellentAEF.AX trades at attractive valuation levels.
Growth Score
ExcellentAEF.AX delivers strong and consistent growth momentum.
Financial Health Score
ExcellentAEF.AX maintains a strong and stable balance sheet.
Profitability Score
ExcellentAEF.AX achieves industry-leading margins.
Key Financial Metrics
Is AEF.AX Expensive or Cheap?
P/E Ratio
AEF.AX trades at 21.50 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, AEF.AX's PEG of 1.29 indicates fair valuation.
Price to Book
The market values Australian Ethical Investment Ltd. at 11.17 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 13.45 times EBITDA. This signals the market has high growth expectations.
How Well Does AEF.AX Make Money?
Net Profit Margin
For every $100 in sales, Australian Ethical Investment Ltd. keeps $19.01 as profit after all expenses.
Operating Margin
Core operations generate 43.05 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $55.44 in profit for every $100 of shareholder equity.
ROA
Australian Ethical Investment Ltd. generates $34.38 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Australian Ethical Investment Ltd. produces operating cash flow of $29.26M, showing steady but balanced cash generation.
Free Cash Flow
Australian Ethical Investment Ltd. generates strong free cash flow of $29.11M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.26 in free cash annually.
FCF Yield
AEF.AX converts 5.46% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
21.50
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.29
vs 25 benchmark
P/B Ratio
Price to book value ratio
11.17
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.15
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.06
vs 25 benchmark
Current Ratio
Current assets to current liabilities
78.59
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.55
vs 25 benchmark
ROA
Return on assets percentage
0.34
vs 25 benchmark
ROCE
Return on capital employed
0.79
vs 25 benchmark
How AEF.AX Stacks Against Its Sector Peers
| Metric | AEF.AX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 21.50 | 18.89 | Worse (Expensive) |
| ROE | 55.44% | 818.00% | Weak |
| Net Margin | 19.01% | 2473.00% | Weak |
| Debt/Equity | 0.06 | 0.94 | Strong (Low Leverage) |
| Current Ratio | 78.59 | 692.63 | Strong Liquidity |
| ROA | 34.38% | -24053.00% (disorted) | Strong |
AEF.AX outperforms its industry in 3 out of 6 key metrics, particularly excelling in ROA, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Australian Ethical Investment Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
130.58%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
105.83%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
192.79%
Industry Style: Value, Dividend, Cyclical
High Growth