Shares in Judo Capital Holdings Ltd (ASX: JDO) are deeply in the red over a 12-month period, but after the release of the company’s results this week, brokers are tipping a rebound.

The shares fell sharply in late June after the company announced a downgrade in expected pre-tax earnings from $180-$190 million down to $163-$169 million.

Over a 12-month period the company’s shares are 39.6% lower.

But after the company’s results this week, the analyst teams at both Morgans and Macquarie are tipping some serious share price upside for the stock.

Judo looking forward after solid profit result

Let’s have a quick look at what Judo reported this week.

The company reported a pre-tax profit of $168.1 million, up 34%, with Judo saying this reflected strong revenue growth.

Judo enjoyed above system lending growth, with gross loans and advances of $14.7 billion, up 18% year on year, at the top end of guidance.

Deposit balances also grew 24% to $12.2 billion.

Judo is expecting pre-tax profit to come in at $210-$220 million for the current year.

Chief Executive Officer Chris Bayliss said regarding the result:

FY26 has been another year of genuine momentum for Judo. While the increase in specific provisions late in the year was disappointing, the underlying performance of the Bank has remained strong, with record revenue, continued operating leverage, strong deposit growth and lending at the top end of guidance. We have continued to deliver above-system growth, underpinned by our customer value proposition of smarter judgement, faster decisions, and stronger relationships. With major investments in our core technology platforms behind us, we are now focused on delivering operating leverage and driving our return on equity. As we continue to scale the loan book, we are seeing more of our revenue growth translate to profit growth. Our cost to income ratio has improved significantly to now be the lowest in the sector3, and will keep improving as we scale.

Judo Capital shares looking cheap

Macquarie said in a note to its clients that the question is, “whether Judo is able to achieve that balance between margins, growth, and credit quality to achieve returns at scale”.

The analysts said while it was difficult to be certain, “we think the valuation discount adequately compensates the risks”.

Macquarie has a price target of $1.65 on Judo shares compared to $1.06 currently.

Morgans meanwhile said they expected earnings growth to be in the strong double digits from FY28-FY28.

They said:

Short-term target price is $1.42/share, but we think by the end of this decade JDO could be worth close to $2/share. JDO is higher risk and more cyclically exposed than the major banks, but investors are compensated by higher potential returns at current prices.  

The post How high will Judo Capital shares go? Brokers have their say appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Netwealth Group Ltd (ASX: NWL) has quietly built a powerful position in Australia’s growing wealth management industry.

I think the next decade could give this tech stock, which is part of the S&P/ASX 200 Index (ASX: XJO), an even bigger opportunity as more money flows into superannuation and financial advisers continue embracing modern investment platforms.

Here is why I would be happy to own Netwealth shares for the long term.

More money can keep moving onto the platform

Netwealth provides the technology and administration that financial advisers use to manage investments and superannuation for their clients.

I like this business model because growth can build on itself.

An adviser who chooses Netwealth can gradually move more clients onto the platform. Existing clients can contribute more money over time, while rising investment markets can increase the value of assets already sitting there.

Netwealth finished June with $135.7 billion of funds under administration after attracting $15.4 billion of net flows during FY26.

The net flows are the figure that catches my eye. They show investors and advisers are actively choosing to place more money with Netwealth rather than growth simply coming from rising share markets.

Australia’s superannuation system should also continue creating an expanding pool of assets for platforms to compete over. If Netwealth keeps winning more than its current share, I think the business could become substantially larger by 2036.

It can become more valuable to advisers

There is another part of the story I find interesting.

Netwealth does not have to rely solely on attracting more funds. It can also give advisers more reasons to use its technology.

Managed accounts are a good example. These allow advisers to manage client portfolios more efficiently while making changes across many accounts at once. Netwealth’s managed account funds under management reached $30.5 billion at the end of June, almost 30% higher than a year earlier.

I think that growth says something important about the relationship Netwealth is building with advisers.

The more of their work that can be completed through the platform, the more embedded Netwealth can become in how an advice practice operates.

The company is continuing to broaden its offering as well. It recently launched Netwealth Private for sophisticated investors and an Individual HIN solution that allows advisers and clients to hold Australian securities directly while still using Netwealth’s technology and administration.

That gives Netwealth more ways to serve clients whose needs become increasingly complex as their wealth grows.

There is still plenty to compete for

Netwealth has already become a major platform provider, but Australia’s wealth management market is enormous.

That leaves room for the ASX 200 tech stock to keep winning advisers from older platforms and deepen relationships with the advisers already using it.

Competition will remain strong, particularly from HUB24 Ltd (ASX: HUB) and established financial institutions investing in their own platforms.

For me, that makes continued net inflows an important sign to watch. Netwealth expects FY27 net flows of between $18 billion and $20 billion, which would represent another step up from FY26 if management delivers on that outlook.

I think sustained inflows at that level could transform the scale of the business over a decade.

Foolish takeaway

Netwealth is the type of ASX 200 tech stock where I would be happy to give the investment plenty of time.

Every year of strong inflows adds more assets to the platform, while new technology can make the relationship with advisers deeper.

If that continues through to the 2030s, I think today’s Netwealth could eventually look like an early chapter in a much larger story.

The post Could this ASX 200 tech stock be one of the best to own for the next decade? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Hub24. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 and Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool Australia has recommended Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

After posting strong returns so far in August, the median growth-oriented superannuation fund is up an impressive 1.3% already this financial year, according to research company Chant West.

A weak start bolstered by a strong August

Returns in July for the median growth fund, with 61% to 80% growth assets, were a modest 0.3%, however with share markets performing well in August so far, Chant West estimates the median growth fund is up 1.3% over the first seven weeks of the new financial year.

Chant West Head of Superannuation Investment Research, Mano Mohankumar, said that share markets were mixed during July with significant variation in returns across regions.

He said:

Over the month, developed market international shares returned 0.2% in hedged terms, largely due to a flat month from US shares, as the technology sector came under pressure amid concerns about the scale of AI investment and uncertainty surrounding future revenue growth. Due to the appreciation of the Australian dollar over the month, the return in unhedged terms was in the red at -0.9%. On average, super funds have about 70% of international shares unhedged. Emerging markets declined 4.4% where the previously strong performance from the tech sector in South Korea and Taiwan reversed sharply. Australian shares, on the other hand, were up a healthy 2.1% over the month supported by the financials and resources sectors, as well as the markets’ relatively low tech and AI-related exposure. Bonds weakened with Australian and international bonds falling 0.4% and 0.9%, respectively, as bond yields rose on renewed inflation concerns.

For July, all growth funds led returns among all superannuation products with 0.5%, while conservative funds were steady at 0% gains.

Superannuation a good long-term bet

Mr Mohankumar said over the longer term, superannuation funds had outperformed their objectives.

He said:

Since the introduction of compulsory super in July 1992, the median growth fund has returned 8% p.a. The annual CPI increase over the same period is 2.7%, giving a real return of 5.3% p.a. – well above the typical 3.5% target. Even looking at the past 20 years, which includes three major share market downturns – the GFC in 2007-2009, COVID-19 in 2020, and the high inflation and rising interest rates in 2022 – super funds have returned 6.9% p.a., which is still ahead of the typical objective.

Over the past 10 years, all growth superannuation products have outperformed all other funds, returning a compound 9.3%.

This compares to growth funds with 7.6% and conservative funds with 4.5%.

Chant West said all risk categories have generally met their typical long-term return objectives, which generally range from inflation plus 1.5% for conservative funds to inflation plus 4.25% for all growth.

The post Superannuation funds have started the financial year well. See how much they’re up appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.