ASX shares have been under a lot of pressure over the past couple of months, as renewed inflation woes and panicking investors weigh heavily on the market.

And it made me question: Does a share price decline always signal trouble ahead? Or do investors sometimes overlook a company’s true value?

I decided to look at the bear case for three ASX shares, and I think the market is getting it wrong.

Here’s why.

Netwealth Group Ltd (ASX: NWL)

The bear case

Netwealth posted an impressive FY26 result in August, including a 20.6% increase in total income and a 18% increase in EBITDA. 

But despite a solid result, the share price has continued falling. At the time of writing, the shares have dropped around 27% since the company’s results announcement. They’re down 37% for the year-to-date.

The ASX financial shares have caught up in a board-based sell-off across the financial sector over the past couple of months, driven by inflation concerns and higher interest rates.

Some investors seem to be disappointed by the company’s softer-than-expected platform growth. These are also concerns about margin pressure, and questions about whether its valuation has run too far ahead.

Some more company-specific news hasn’t helped confidence either. 

Last week, Netwealth trimmed its full-year funds under administration (FUA) target to $17 billion to $19 billion, down from $18 billion to $20 billion previously. Management said the revision is due to elevated market volatility and extended client decision-making timelines among financial advisers.

Elsewhere, Netwealth announced last month that two of its subsidiaries have been served a class action over its failed First Guardian Master Fund. 

Again, investors are spooked and many appear to be continuing to offload their shares.

But is the share price downturn justified? Is the bear case already priced in?

My view on the ASX shares

I think investors are too focused on the company’s near-term figures when they should be focused on longer term growth.

Yes, Netwealth downgraded its FY27 guidance, but the company has already flagged that there is no structural deterioration in its competitive position. 

It’s also worth pointing out that the updated range still sits above market expectations. For example, brokers at UBS expect Netwealth’s FUA to come in at around $16.3 billion for FY27. 

Regarding the latest class action news, Netwealth previously paid around $101 million in compensation to affected members and has already addressed the issue with ASIC. The compensation program was completed in January 2026 and Netwealth has confirmed it intends to defend the class action.

I think the selloff has been overdone, and the bear case has already been priced into the current share price.

Life360 Inc (ASX: 360)

The bear case

Life360 shares have been smashed lower by an overall investor rotation away from high growth tech stocks, persistent inflation, interest rate fears, and a deterioration in investor confidence.

The ASX shares have fallen around 33% since the company posted its second-quarter FY26 update, and are down 39% for the year-to-date, at the time of writing.

It looks like investors have struggled to digest the latest update, which included a 38% increase in revenue and a 53% hike in EBITDA. It also said it expects FY26 revenue growth to accelerate from 33% to 40% year-on-year.

The result was solid, but it wasn’t enough to impress investors, who expected another upward revision in full-year guidance. 

Some claim that the lack of guidance upgrade against a background of strong results suggests the company could be plateauing. 

And there are also questions about whether the company can actually turn its large user base into a sustainable and reliable revenue going forward. 

Again I asked, is the share price downturn justified? And is the bear case already priced in for Life360 shares?

My view on the ASX shares

I think the market is far too pessimistic on Life360 shares, and expectations of a guidance upgrade were overdone.

Life360 has a dominant market position as a global location-services provider. The company recently announced that its monthly active users reached just over 102 million in the second quarter of FY26. That’s a 16% year-on-year increase.

The business is based on a subscription model, which means it is able to drive rapid revenue from a recurring income. And it is also expanding into hardware products to create other ways of driving revenue growth, such as Tile and Pet GPS.

The company is clearly pushing forward with growth, and it has a great trajectory ahead. I think the share price decline is the result of fickle sentiment rather than any legitimate long-term concerns.

I think there are plenty of growth opportunities ahead for Life360 and its shares. It looks like the bear case is more focused on pushing an already depressed share price even lower, rather than the company’s true value.

NextDC Ltd (ASX: NXT)

The bear case

The ASX shares have fallen around 34% over the past two months, and they’re are down 26% for the year-to-date.

Investors are mostly concerned about the company’s heavy capital expenditure, and the risk associated with turning its spending into revenue. 

NextDC is currently executing a huge multi-billion dollar expansion plan, with a focus on scaling AI-ready infrastructure across Sydney, Melrbourne, Perth and Kuala Lumpur. 

For FY26, the company’s $3.4 billion capex for the year was $397 million above the top end of its guidance. This reflects land acquisitions and accelerated construction to meet customer delivery dates.

The heavy upfront capital expenditure means the company is reliant on continuous debt or equity funding. 

It also means that the company is affected by high interest rates or tighter credit conditions. These two things can can hike the costs of construction at its data centres.

Investors are understandably wary that the plan comes at a huge risk, and there are questions about whether it can pull it off at the scale it plans.

My view on the ASX shares

NextDC operates data centres in Australia, New Zealand, and Southeast Asia. The company builds and operates secure facilities where businesses can house their servers and IT equipment. 

Development and expansion of its physical centres, cooling, power, security services, and project support come at a high cost. 

But data usage is widely expected to explode, driven by artificial intelligence (AI) workloads, cloud computing, and digital transformation. And that means demand for NextDC’s secure, high-quality data centres will also likely experience a huge surge in demand.

In my view, the company is investing well to position itself for when the AI boom happens. And I think investors are underestimating what that could be worth. 

The post I looked at the bear case for these 3 ASX shares, and came to a different conclusion. Here's why appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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 Life360 and Netwealth Group. The Motley Fool Australia has positions in and has recommended Life360 and Netwealth Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Meridian Energy Ltd (ASX: MEZ) share price is in focus after the company delivered a strong operating update for September 2026, with record first quarter generation and robust storage levels.

What did Meridian Energy report?

• Q1 2027 hydro inflows 154% of historical average, up 29% on Q1 last year
• Q1 generation up 18.9% year-on-year, setting a new quarterly record
• Average generation price 64.3% lower compared to Q1 last year
• Total operating costs rose 1.1% while capital expenditure nearly doubled, up 93.9%
• Total retail sales volumes in Q1 fell 3.0% year-on-year
• Customer numbers at quarter end were 0.9% lower than a year ago

What else do investors need to know?

September 2026 featured mild weather, with inflows into Meridian’s lakes at 150% of historical average. Hydro storage stayed well above long-term norms—Waitaki water storage finished the quarter at 183% of the historical average, and Waiau at 133%.

Retail sales volumes slipped year-on-year, particularly in agriculture (down 21.4%) and corporate (down 10.6%), but small and medium business volumes rose 11.7% and large business was up 9.2%. More than half of Meridian’s customer base has now been moved onto the Kraken digital platform, supporting operational efficiency.

Guidance for FY27 total capital expenditure remains unchanged at $370 million to $410 million. Of this, “stay in business” spend is forecast at $110–$120 million, growth capital expenditure at $220–$250 million, and repowering outlays at $40 million.

What did Meridian Energy management say?

Chief Executive Mike Roan said:

Despite mild weather during September, we continue to have inflows and lake storage that are well above historical averages. These factors enabled us to maintain high levels of hydro generation, lifting our overall generation for the first quarter of a financial year to a record level. It was also pleasing to see a return to growth in customer numbers, while we have now migrated more than half of all our customers onto the Kraken platform.

What’s next for Meridian Energy?

Meridian is maintaining its investment plans, with a clear focus on asset renewal, network growth, and repowering projects. Strong hydro conditions underpin its generation outlook, while the integration of more customers onto the Kraken platform is expected to drive further operational benefits.

The company is also closely monitoring market conditions, including forward electricity pricing and changing demand patterns—especially as weather trends and the New Zealand Aluminium Smelter’s load both remain key factors for the sector.

Meridian Energy share price snapshot

Over the past 12 months Meridian Energy shares have declined 14%, trailing the S&P/ASX 200 Index (ASX: XJO), which has declined 2% over the same period.

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The post Meridian Energy posts record Q1 hydro generation in FY27 update appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

The Regis Resources Ltd (ASX: RRL) share price is in focus today after the company reported steady first-quarter gold production and a strong cash and bullion position of $1.28 billion.

What did Regis Resources report?

• Group gold production of 83,000 ounces for Q1 FY27, meeting expectations despite heavy September rainfall
• All-in sustaining cost (AISC) of $3,617 per ounce, including $114/oz in non-cash costs
• Gold sales of 74,500 ounces generated $454 million in revenue with an average realised price of $6,088/oz
• Operating cash flow of $265 million, with $146 million pre-tax cash and bullion generated in the quarter
• Cash and bullion increased to $1.28 billion as of 30 September 2026
• Post-quarter, $152 million in fully franked final FY26 dividends paid (20 cents per share)

What else do investors need to know?

The first quarter’s production was impacted by significant rainfall at Duketon, which temporarily delayed access to higher-grade ore and increased reliance on lower-grade stockpiles. Both Duketon and Tropicana operations retained full-year guidance, with managers flagging a stronger second half as multiple new open pits ramp up.

Regis received a $51 million break fee from Vault Minerals following the termination of their proposed merger, supporting quarter-on-quarter growth in cash and bullion. After period end, board succession plans were actioned, with Chairman James Mactier and director Fiona Morgan set to retire following the Annual General Meeting, and Ian Macliver joining as chairman-elect.

What did Regis Resources management say?

Regis Resources Managing Director and CEO Jim Beyer commented:

Group gold production of 83.0koz for the September quarter was in line with our expectations accounting for the significant rainfall in September. This event delayed access to higher grade open pit ore and inhibited ore haulage. Our all-in sustaining costs of $3,617/oz reflected this quarter’s lower production. Production will progressively increase over FY27, as previously guided. Cash and bullion increased by $93 million over the quarter to $1.28 billion, after $53 million in tax payments and including the $51 million break fee received from Vault Minerals. Reflecting the strength of our performance in the second half of the FY26 year we declared fully franked final dividends (ordinary and special) of $152 million to shareholders during the quarter. We welcome the Federal Court’s finding that the Section 10 Declaration over part of the McPhillamys site is legally invalid, which vindicates the position we have held since August 2024. The judgment adds important potential optionality alongside the alternative development pathway we continue to progress, and we look forward to engaging constructively through the redetermination process. As we begin to implement the Board succession and renewal plan, I want to thank James Mactier and Fiona Morgan for their significant contribution over more than a decade on the Board. This was a period in which Regis acquired its 30% interest in Tropicana and Duketon became a significant underground operation. I also welcome Ian Macliver, who brings extensive experience as a director and chair in the mining sector, and look forward to working with him as Chairman-elect.

What’s next for Regis Resources?

Looking ahead, management reaffirmed full-year production and cost guidance, expecting output to be weighted towards the second half of FY27 as new open pits at Duketon come online. Exploration activity continues, with promising drilling results at Rosemont Underground and ongoing development work at McPhillamys after favourable legal developments.

Investors should note some upcoming cash outflows, including a “catch-up” FY26 tax payment of about $220–240 million and the final dividend payment. The Board renewal process continues, aiming to ensure smooth leadership transition and continuity.

Regis Resources share price snapshot

Over the past 12 months, Regis Resources shares have risen 12%, outperforming the S&P/ASX 200 Index (ASX: XJO), which has declined 2% over the same period.

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The post Regis Resources posts Q1 FY27 production, grows cash and bullion position appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.