Commonwealth Bank of Australia Fundamental Analysis (ASX: CBA.AX)
Commonwealth Bank of Australia Fundamental Analysis (ASX: CBA.AX)
Commonwealth Bank of Australia (ASX: CBA.AX) shows moderate financial fundamentals with a PE ratio of 24.19, profit margin of 15.43%, and ROE of 13.94%. The company generates $70.4B in annual revenue with moderate year-over-year growth of 6.43%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 34.2/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze CBA.AX's fundamental strength across five key dimensions:
Efficiency Score
WeakCBA.AX struggles to generate sufficient returns from assets.
Valuation Score
ModerateCBA.AX shows balanced valuation metrics.
Growth Score
ModerateCBA.AX shows steady but slowing expansion.
Financial Health Score
WeakCBA.AX carries high financial risk with limited liquidity.
Profitability Score
WeakCBA.AX struggles to sustain strong margins.
Key Financial Metrics
Is CBA.AX Expensive or Cheap?
P/E Ratio
CBA.AX trades at 24.19 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, CBA.AX's PEG of 3.33 indicates potential overvaluation.
Price to Book
The market values Commonwealth Bank of Australia at 3.34 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 0.20 times EBITDA. This is generally considered low.
How Well Does CBA.AX Make Money?
Net Profit Margin
For every $100 in sales, Commonwealth Bank of Australia keeps $15.43 as profit after all expenses.
Operating Margin
Core operations generate 22.12 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $13.94 in profit for every $100 of shareholder equity.
ROA
Commonwealth Bank of Australia generates $0.75 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Commonwealth Bank of Australia generates limited operating cash flow of $-177.01M, signaling weaker underlying cash strength.
Free Cash Flow
Commonwealth Bank of Australia generates weak or negative free cash flow of $0.00, restricting financial flexibility.
FCF Per Share
Each share generates $0.00 in free cash annually.
FCF Yield
CBA.AX converts 0.00% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
24.19
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.33
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.34
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.73
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
3.92
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.45
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.14
vs 25 benchmark
ROA
Return on assets percentage
0.007
vs 25 benchmark
ROCE
Return on capital employed
0.01
vs 25 benchmark
How CBA.AX Stacks Against Its Sector Peers
| Metric | CBA.AX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 24.19 | 21.07 | Worse (Expensive) |
| ROE | 13.94% | 659.00% | Weak |
| Net Margin | 15.43% | -1620.00% (disorted) | Strong |
| Debt/Equity | 3.92 | 0.91 | Weak (High Leverage) |
| Current Ratio | 0.45 | 928.89 | Weak Liquidity |
| ROA | 0.75% | -588.00% (disorted) | Weak |
CBA.AX outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Commonwealth Bank of Australia's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
109.58%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
11.52%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
-173.06%
Industry Style: Value, Dividend, Cyclical
Declining