Author: openjargon

Shares in Qantas Airways Ltd (ASX: QAN) fell 9% on Thursday following the release of the airline’s half-year results.

That drop came despite Qantas delivering an underlying profit before tax of $1.46 billion and underlying earnings per share of 68 cents for the half. In other words, the result itself was solid.

So the question is not whether the numbers were weak. It is whether the pullback has created an opportunity.

Here is why I would be leaning towards yes.

Earnings funding a more profitable future

One of the most important themes in the release was fleet renewal.

CEO Vanessa Hudson made it clear that strong earnings are allowing Qantas to invest in “the largest fleet renewal in our history.” She also noted that the next-generation aircraft already in service are helping drive financial performance.

That matters.

Airlines are capital-intensive businesses. The difference between an average airline and a high-quality one often comes down to fleet age, fuel efficiency, maintenance costs, and network flexibility.

Qantas delivered nine new aircraft during the half and is accelerating deliveries, with 30 more expected over the next 18 months. Around 60% of Jetstar’s increase in profitability in the half was driven by its new aircraft, according to management.

In other words, earnings today are being reinvested into assets that should improve margins tomorrow.

Newer aircraft are more fuel efficient, cheaper to maintain, and open up new routes such as the ultra long-range A350s for Project Sunrise. Over time, that can structurally lift returns on capital.

A dominant position in a rational market

Airlines typically trade on low earnings multiples because they operate in brutally competitive markets.

But Australia is different.

Qantas operates in what is effectively a duopoly domestically, alongside Virgin Australia Holdings Ltd (ASX: VGN). That structure has historically supported rational capacity growth and healthier margins than seen in markets like the US or Europe.

Group Domestic delivered $1.05 billion in underlying EBIT in the half, up 14%. Loyalty also remains a high-quality earnings stream, with underlying EBIT of $286 million, up 12%.

When you combine the core airline business with a fast-growing, high-margin loyalty arm, you start to see why Qantas arguably deserves to trade at a premium to many global peers.

Valuation looks compelling

Qantas reported underlying earnings per share of 68 cents in the first half. If we annualise this to 136 cents, Qantas shares are trading at roughly 7.1 times earnings.

Yes, airlines often trade on low multiples. Cyclicality, fuel price volatility, and geopolitical risk justify some discount.

But I think Qantas is not a typical airline.

It has a dominant position in a relatively insulated domestic market, a dual-brand strategy through Qantas and Jetstar, a valuable and growing Loyalty division, a clear fleet renewal program that is already driving profit improvements, and strong liquidity of $12.6 billion at the end of the half.

That combination makes it closer, in my view, to a high-quality franchise than a marginal commodity business.

In some ways, I think of it like the Commonwealth Bank of Australia (ASX: CBA) of the airline industry. CBA trades at a premium to other banks because of its scale, brand, technology leadership, and dominant market position. Investors are willing to pay up for quality and consistency.

Qantas may never trade on a bank-like multiple. But if it continues to execute, invest in its fleet, grow Loyalty, and maintain pricing discipline in a rational market, I think 7.1 times earnings could prove dirt cheap.

So, should I buy Qantas shares after the 9% fall?

For me, a 9% pullback after a strong profit result is not a red flag. It is often the market digesting guidance, costs, or simply locking in gains after a strong run.

What matters more is whether the long-term story is intact.

Qantas is generating significant earnings. Those earnings are funding a younger, more efficient fleet. The loyalty business continues to expand. The domestic market structure remains rational. And the shares are trading on a low earnings multiple relative to that quality.

Airlines will always carry risk. Fuel costs, economic slowdowns, and operational disruptions can hurt profits quickly.

But at around 7 times annualised earnings, with structural improvements underway, I would be comfortable buying Qantas shares after this decline as part of a diversified portfolio.

The post Should I buy Qantas shares after their 9% decline? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia. 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.

As February earnings season draws to a close, brokers are updating their outlooks on ASX shares following important announcements. 

Two S&P/ASX 300 Index (ASX: XKO) shares that received fresh guidance from Bell Potter yesterday were Capricorn Metals Ltd (ASX: CMM) and Elders Ltd (ASX: ELD). 

Both saw solid share price increases on Thursday for different reasons. 

Capricorn Metals released HY results, while Elders made headlines by announcing the sale of a key part of its business. 

Here’s what the companies released. 

Capricorn Metals delivers record profit

Capricorn Metals is a gold production company based in Perth, Western Australia. 

Investors reacted positively to half-year results from Capricorn Metals that included:

• Sales revenue up 64% to $350.1 million from the sale of 59,816 ounces of gold at an average price of $5,842 per ounce
• Underlying net profit after tax up 130% to $144.8 million
• Underlying EBITDA rose 101% to $215.3 million with a 62% margin
• Maiden fully-franked interim dividend of 5 cents per share ($22.8 million) declared.

Following yesterday’s 1.45% gain, its share price is now up 77.6% over the last 12 months.  

What did Bell Potter have to say?

Following the results, the team at Bell Potter said it was an excellent result that reflects operational performance, with the company tracking to the top end of guidance and maintaining its track record of delivery. 

It increased earnings per share by: FY26: +3%; FY27: +4%; and FY28: +25%. 

CMM is a sector leading gold producer, unhedged and debt free. It is fully funded to grow production from ~115kozpa to ~300kozpa, potentially from 2HCY27, from two gold mines in WA, each with +10 year mine lives.

CMM is run by a management team that has an excellent track record of delivery.

As a result, the broker increased its price target on these ASX shares to $16.10 (previously $14.30). 

From yesterday’s closing price of $14, this indicates a potential upside of 15%. 

The broker also retained its buy recommendation. 

Elders shares downgraded

Elders is an agribusiness that provides goods and services to Australian primary producers.

Yesterday, the company announced it has agreed to sell its Killara Feedlot business to Australian Meat Group for approximately $195.8 million. 

Following the announcement, Bell Potter released updated guidance on the company. 

NPAT changes are -14% in FY26e, -9% in FY27e and -8% in FY28e incorporating the above and higher base interest rates. Our target price is now $9.00/sh (prev. $9.45/sh) reflecting earnings changes mitigated in part by higher Killara proceeds.

From yesterday’s closing price of $7.40, the broker still sees 21% upside for these ASX shares. 

The broker maintained its buy recommendation. 

Our Buy rating is unchanged. We see encouraging signs for FY26e, with livestock turnoff values exhibiting double digit YoY growth through 1H26TD, mitigated in part by dryer conditions through most of the summer cropping window and an easing in input price tailwinds.

The post Bell Potter just updated its guidance on these ASX 300 shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell 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 recommended Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It’s usually a pretty good sign when senior management are forking out their own money for shares in a business, which is exactly what the Wisetech Global Ltd (ASX: WTC) Chief Executive Officer has done, shelling out more than $1 million this week.

Wisetech said in a statement to the ASX on Friday that CEO Zubin Appoo had bought 20,020 shares for $1,000,049.

The shares were bought on Thursday, 26  February, a day after the company reported its first-half results.

The company added:

Following settlement, Mr Appoo will hold (directly and indirectly) 102,160 shares in WiseTech, in addition to 6,289 unvested share rights under the Company’s Equity Incentives Plan for employees.  

Wisetech leaning into AI

And if analysts’ predictions for Wisetech shares are on the money, Mr Appoo could be sitting on a hefty profit in the year to come.

The team at Bell Potter ran the ruler over this week’s results and like what they see, but first, let’s have a look at what the company reported.

Wisetech said in a statement to the ASX on Wednesday that revenue for the first half was 76% higher at US$672 million, with EBITDA 31% higher at US$252.1 million.

Net profit fell 36% to US$68.1 million, while free cash flow was 24% higher at $153.6 million.

What piqued the interest rate of many market watchers was the company’s stance on artificial intelligence, with Wisetech flagging far-reaching staff cuts as AI adoption ramped up.

As the company said:

WiseTech is undergoing a deep AI transformation, as AI continues to be embedded across its software for customers and internal operations. This will accelerate productivity, automation and decision-making across the industry’s complex, regulated workflows, and across WiseTech’s own operations. WiseTech today announced the next phase of their efficiency program, starting in the second half of FY26 and continuing into FY27, expecting to reduce teams – initially product & development and customer service across the company, including e2open, by up to 50% in terms of headcount. As part of WiseTech’s long-term strategic focus on higher-margin recurring revenue, and WiseTech’s commitment to building a higher-performance culture, this program will likely result in a reduction of approximately 2,000 roles in FY26 and into FY27.

So the company is looking to maintain its rapid growth profile, while saving money with deep jobs cuts.

Wisetech shares looking cheap

The Bell Potter team said they had made modest changes to their calculations for Wisetech, slightly reducing their price target to $83.75 while maintaining a buy recommendation.

This compares with a price for Wisetech shares of just $49 currently, which is near the lower end of the company’s trading range over the past 12 months.

The post The boss of which tech company has just bought $1m worth of shares? appeared first on The Motley Fool Australia.

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

The TPG Telecom Ltd (ASX: TPG) share price is in focus today after the company reported a 4.2% rise in mobile service revenue and an 18.4% jump in EBITDA for 2025, underpinned by its strongest mobile subscriber growth since 2022.

What did TPG Telecom report?

• Service revenue increased 2.2% to $4,179 million, with mobile service revenue up 4.2% to $2,423 million
• EBITDA rose 18.4% to $1,660 million; on guidance basis, up 2.0% to $1,637 million
• Net profit after tax (NPAT) of $52 million, compared to a loss of $140 million in FY24
• Operating free cash flow (OFCF) of $1,291 million, up 98.9%
• Final dividend of 9.0 cents per share (30% franked), taking total FY25 dividends to 18.0 cents
• $3 billion capital return and $2.7 billion in bank borrowings repaid

What else do investors need to know?

TPG Telecom credited its 2025 performance to a successful regional mobile network expansion, which brought in 228,000 new mobile subscribers. Growth was strongest in digital-first brands and the EGW business, with average revenue per user ticking up to $35.51.

The company also completed the sale of key infrastructure and business units, making TPG a leaner, more mobile-focused business. Management noted that lower ongoing capital spending and new financing initiatives are expected to continue supporting healthy free cash flow.

What did TPG Telecom management say?

CEO and Managing Director Iñaki Berroeta said:

2025 was a transformational year for TPG Telecom. We delivered another year of mobile subscriber growth, cementing our position as Australia’s leading challenger telco… We are well-positioned to unlock further value for customers and shareholders. We are targeting continued growth in our share of Mobile Service Revenue, growing EBITDA margins as we keep costs strongly under control, and ongoing growth in free cash flow, earnings per share and return on capital.

What’s next for TPG Telecom?

Looking ahead, TPG Telecom has set guidance for FY26 EBITDA between $1,665 million and $1,735 million, with capital expenditure of around $750 million. The company expects continued mobile growth and tight cost control to support these targets.

Management is prioritising dividend growth in line with sustainable profits and cash flow, subject to Board approval, and will continue to drive efficiencies as it further streamlines its operations.

TPG Telecom share price snapshot

Over the past 12 months, TPG Telecom shares have declined 10%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 11% over the same period.

View Original Announcement

The post TPG Telecom FY25 earnings: Mobile subscribers drive profit growth 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 Virgin Australia Holdings Ltd (ASX: VGN) share price is in focus after the airline reported a 11.7% lift in underlying EBIT for the first half of FY26, with underlying NPAT up 20.7% to $279 million despite ongoing industry cost pressures.

What did Virgin Australia report?

• Revenue: $3.32 billion, up 9.3% on 1HFY25
• Underlying EBIT: $490 million, up 11.7%
• Underlying NPAT: $279 million, up 20.7%
• Statutory NPAT: $341 million, down 27.9% due to prior period tax benefits
• Underlying EBIT margin: 14.8%, up 40bps
• Net debt to underlying EBITDA: 0.9x, below target range

What else do investors need to know?

Virgin Australia’s transformation program delivered over $200 million in gross benefits, partially offsetting inflationary headwinds like airport charges. The company’s strong financial position is supported by $1.4 billion in liquidity and a net debt position well below its target range, even as it plans to purchase more aircraft in the second half.

Operationally, the airline achieved a domestic on-time departure rate of 72.6% and maintained a completion rate ahead of its competitors. Customer satisfaction continues to rise, with a three-point increase in Net Promoter Score and over 700,000 new Velocity members added during the half.

What did Virgin Australia management say?

Chief Executive Officer and Managing Director Dave Emerson said:

The Group’s continued strong performance clearly demonstrates that our constant focus on transformation and innovation is not only delivering strong financial outcomes but strengthens our ability to remain a robust competitor for years to come.

Virgin Australia is proud to play a critical role in delivering choice and value for Australian travellers, and we are laser-focused on serving our core customer groups of premium leisure, small and medium enterprises, and value-conscious corporates. Through careful cost management and decision making, we are striking the right balance between value, flexibility and quality, and our customers are responding well.

What’s next for Virgin Australia?

The airline expects demand for air travel to stay strong, with plans to increase domestic capacity by 2–3% in the second half of FY26 and 3% in early FY27. Virgin Australia targets continued EBIT growth, ongoing benefits from its transformation program, and growth in the Velocity loyalty business.

Investments include further aircraft purchases, with capex of $850–950 million anticipated for FY26, and much of the fleet will be upgraded with Wi-Fi. Ongoing discipline in capacity and cost management aims to keep the balance sheet strong and support future shareholder returns.

Virgin Australia share price snapshot

For the year to date, Virgin Australia shares have declined 9%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 5% over the same period.

View Original Announcement

The post Virgin Australia posts 1HFY26 earnings appeared first on The Motley Fool Australia.

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• PEXA Group posts 1H FY26 earnings

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 WAM Capital Ltd (ASX: WAM) share price is in focus today after the company reported half-year profit of $24.1 million, an 83.9% decrease from the prior period, and declared an interim dividend of 7.75 cents per share, partially franked at 60%.

What did WAM Capital report?

• Revenue: $43.5 million, down 82.3% from the prior half
• Net profit after tax (NPAT): $24.1 million, down 83.9%
• Profit before tax: $30.2 million, down 85.5%
• Interim dividend: 7.75 cents per share, 60% franked, payable 29 May 2026
• Net tangible asset backing (after tax) per share: $1.61 (down from $1.68)
• Total shareholder return: 22.6% including franking credits for the half-year

What else do investors need to know?

WAM Capital’s investment portfolio gained 2.0% over the half, trailing the S&P/ASX All Ordinaries Accumulation Index return of 4.4% and the Small Ordinaries’ 17.4%. The value of the portfolio increased by $40.5 million, with returns weighed down compared to last year’s stronger performance.

The board confirmed the company’s fully franked dividend focus. Shareholders will receive the interim dividend with eligible participants able to access the dividend reinvestment plan at a 2.5% discount to the prevailing market price.

What’s next for WAM Capital?

Looking ahead, WAM Capital aims to preserve capital while continuing to pay steady dividends to shareholders. The level of franking on future dividends depends on tax paid on realised profits, while ongoing performance will be shaped by broader market cycles, the investment manager’s strategy, and economic conditions.

Management says it remains focused on supporting capital growth and maintaining a strong risk and governance framework, leveraging the depth of its investment team. Investors should consider the company’s focus on small-to-medium ASX-listed businesses and the ongoing volatility in equity markets.

WAM Capital share price snapshot

Over the past 12 months, WAM Capital shares have risen 7%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 11% over the same period.

View Original Announcement

The post WAM Capital earnings: Dividend steady as half-year profit falls appeared first on The Motley Fool Australia.

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• Virgin Australia posts 1HFY26 earnings
• Coles Group shares: Profit jumps, Supermarkets excel
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• PEXA Group posts 1H FY26 earnings

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 Coles Group Ltd (ASX: COL) share price is in focus today after the supermarket giant reported a 2.5% rise in group sales revenue to $23.6 billion and a strong 12.5% lift in net profit (excluding significant items), with continued momentum across its core Supermarkets division.

What did Coles Group report?

• Group sales revenue: $23.6 billion, up 2.5% on the prior period
• Net profit after tax (excluding significant items): $676 million, up 12.5%
• Group EBIT (excluding significant items): $1,231 million, up 10.2%
• Supermarkets adjusted sales revenue (ex. tobacco): up 6.1%
• Supermarkets eCommerce sales growth: 27.0%
• Interim dividend: 41 cents per share, fully franked

What else do investors need to know?

Coles’ Supermarkets business continued its strong trajectory, with adjusted sales revenue up 6.1% excluding tobacco and robust growth online. Customer satisfaction scores improved across all key areas, and investments in automation and operational efficiency are delivering tangible results.

While Liquor segment sales softened by 3.2%, convenience store performance was a positive, and the ‘Simply Liquorland’ rebranding has now been completed. Coles’ Flybuys loyalty program hit 10 million members, increasing engagement and supporting sales.

Significant items of $235 million before tax were recognised following a Federal Court judgement relating to Fair Work proceedings, but the group’s balance sheet remains strong, with a lease-adjusted leverage ratio of 2.6x and ongoing investment in strategic priorities.

What did Coles Group management say?

CEO Leah Weckert said:

We have delivered another strong set of results in a highly competitive operating environment, successfully cycling the competitor industrial action disruption in November and December 2024. The momentum in our business has enabled us to continue offering a compelling value proposition to customers, particularly over the festive season, while also achieving further improvements in availability and customer experience metrics. It is clear that our focus on executing against our strategic priorities and the successful delivery of our major ADC and CFC transformation investments are delivering benefits for both our customers and our shareholders. As we look ahead we are well positioned, with a strong balance sheet and cash flow generation, to continue to invest in areas that will strengthen and expand our core customer proposition and deliver value for shareholders. I would also like to recognise that over the last two months our teams have done an incredible job in managing the impacts of extreme weather events in parts of Australia, ensuring essential items reach local communities in need. I would like to acknowledge their dedication and hard work, in addition to the work of all of our team members, who bring the Coles values to life every day.

What’s next for Coles Group?

Coles’ outlook remains steady for the second half, with Supermarkets sales revenue growing 3.7% in the first seven weeks of the third quarter. The company will focus on maintaining momentum across value offerings, store renewals, and digital upgrades.

Coles’ major investments in distribution centre automation and omnichannel experience continue to support efficiency and customer satisfaction. Management remains committed to delivering consistent value to shoppers while building a resilient, future-ready business for shareholders.

Coles Group share price snapshot

Over the past 12 months, Coles Group shares have risen 9%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 11% over the same period.

View Original Announcement

The post Coles Group shares: Profit jumps, Supermarkets excel appeared first on The Motley Fool Australia.

More reading

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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 Block (ASX: XYZ) share price is in focus today after the company released its results for the fourth quarter and full year ended 31 December 2025, reporting gross profit growth of 24% over the quarter and a significant 33% rise in Cash App gross profit.

What did Block report?

• Q4 2025 gross profit: US$2.87 billion, up 24% year-on-year
• Cash App gross profit: US$1.83 billion, up 33% year-on-year
• Square gross profit: US$993 million, up 7% year-on-year
• Q4 2025 adjusted operating income: US$588 million (20% margin), up 46% year-on-year
• Diluted EPS: US$0.19; adjusted diluted EPS: US$0.65, up 38% year-on-year
• Raised full-year 2026 guidance to US$12.2 billion gross profit (18% growth) and adjusted operating income of US$3.2 billion (26% margin)

What else do investors need to know?

Block announced a major restructuring, reducing its workforce by over 40%—from more than 10,000 people to just under 6,000. Management explained that advances in artificial intelligence are enabling a smaller team to work more efficiently and at higher velocity.

During the quarter, Block delivered strong growth in lending, with Cash App Borrow origination volume up 223% versus last year. Engagement on Cash App continues to deepen, with monthly active users up to 59 million and primary banking customers reaching 9.3 million.

What’s next for Block?

Looking ahead, Block has lifted its full-year 2026 guidance, now aiming for gross profit growth of 18%, driven by ongoing investment in product development and high return-on-capital lending. The company expects to see benefits from its new, leaner, AI-driven operating model flow through to improved profitability, with a projected adjusted operating income margin of 26% this year.

Management said the focus will be on product speed, scaling AI-powered capabilities, and expanding flagship offerings such as Cash App Green and proactive intelligence products across the business.

Block share price snapshot

Over the past 12 months, the Block shares have declined 28%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 11% over the same period.

View Original Announcement

The post Block Q4 2025 earnings: Profit jumps as AI transformation begins appeared first on The Motley Fool Australia.

More reading

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• PEXA Group posts 1H FY26 earnings

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 positions in and has recommended Block. 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 DroneShield Ltd (ASX: DRO) share price has been a strong performer over the past 12 months.

During this time, the counter-drone technology company’s shares have risen almost 350%.

To put that into context, a $10,000 investment a year ago would now be worth almost $45,000.

Let’s see what Bell Potter is saying about the company and where it thinks its shares could be heading from here.

What is the broker saying?

Bell Potter has been running the rule over DroneShield’s full-year results and was relatively pleased with what it saw. It said:

DRO reported +276% YoY revenue growth to $216.5m in line with BPe. Gross margin (excluding inventory impairment) came in at 64.8% (BPe 67.9%). Opex was $125.3m (BPe $127.8m) led by headcount growth and higher share-based payments.

Stripping out share-based payments ($23.5m) which was unusually elevated during the year, underlying EBITDA was $36.5m an improvement on the CY24 loss of -$4.0m and driven by strong revenue growth. Statutory NPAT was $3.5m. The miss to uEBITDA was driven by weaker than expected gross margin in 2H26e, although it was in line with company guidance.

And while there was an inventory impairment due to customer demand changes, the broker is optimistic that its new systems will prevent wastage in the future. It adds:

DRO recorded $8.5m finished goods and $1.8m raw materials inventory impairments relating to earlier model DroneGuns with customer demand moving to the latest version of the DroneGun Mk4. New ERP implementation aims to reduce wastage in future.

Where next for the DroneShield share price?

The good news is that Bell Potter believes there’s still plenty of upside ahead for this high-flying stock.

According to the note, the broker has retained its buy rating on its shares with a trimmed price target of $4.80.

Based on the current DroneShield share price of $3.69, this implies potential upside of 30% for investors over the next 12 months.

Commenting on its buy recommendation, Bell Potter said:

We believe DRO has a market leading RF detect/defeat C-UAS offering and a strengthening competitive advantage owing to its years of battlefield experience and large and focused R&D team. We expect 2026 will be an inflection point for the global C-UAS industry with countries poised to unleash a wave of spending on RF detect and defeat solutions.

Consequently, we believe DRO should see material contracts flowing from its $2.3b potential sales pipeline over the next 3-6 months as defence budgets roll over to FY26e. At 35x CY26e EV / EBITDA, DRO trades at a discount to the global drone peer group. Further, we see upside risk to our revenue forecasts in CY26/27e, given the opportunities observed in the C-UAS industry.

The post How high can the DroneShield share price climb in 2026? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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 DroneShield. 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.

The PEXA Group Ltd (ASX: PXA) share price is in focus today after the company reported first-half FY26 revenue of $215.3 million, up 10% year-on-year, and Group NPAT of $15.4 million, turning around a prior loss.

What did PEXA Group report?

• Group revenue rose 10% to $215.3 million (1H25: $195.9 million)
• Group EBITDA increased 19% to $85.8 million; EBITDA margin improved to 39.9%
• Group NPATA up 33% to $40.3 million; NPAT from continuing operations was $15.4 million vs a $29.5 million loss a year ago
• Free cash flow lifted 25% to $40.2 million
• Leverage (Net debt/EBITDA) improved to 1.4x from 2.0x

What else do investors need to know?

PEXA’s strong performance was underpinned by record transaction volumes in Australia, hitting an all-time daily high of 41,000 settlements in December 2025. Cost optimisation initiatives in Australia delivered a 2.6% reduction in expenses and are expected to save more than $10 million annually.

In the UK, PEXA saw continuing market recovery with sale and purchase volumes up 15% and remortgage volumes up 24%. The Group moved ahead with implementation for major lender NatWest and expanded its product offering to UK conveyancers, increasing platform engagement.

Capital management was a focus, with PEXA repaying $25 million in debt and pausing its FY25 buyback, aiming to prioritise balance sheet strength and support future investments.

What did PEXA Group management say?

Chief Executive Officer and Group Managing Director Russell Cohen said:

PEXA delivered a strong result in the first half in FY26, underpinned by record transaction volumes in Australia, disciplined cost management and continued progress in the UK. On top of a 10% growth in Group revenue, we delivered EBITDA growth of 19%, with EBITDA margins increasing to 39.9% from 36.8% in 1H25. This reflects operating leverage from higher volumes and the benefits of our cost optimisation program, which is expected to deliver more than $10 million in annualised cash savings.

What’s next for PEXA Group?

In the second half of FY26, PEXA plans to launch its new anti-money laundering product, PEXA Clear, ahead of the 1 July 2026 compliance deadline. Management aims to drive further resilience and innovation in Australia, complete the NatWest rollout in the UK, and keep capital discipline at the forefront.

PEXA has updated its core operating guidance for FY26 to reflect recent performance, now expecting Group revenue of $395 million to $415 million, an improved EBITDA margin of 34–37%, and NPAT of $15 million to $25 million from continuing operations.

PEXA Group share price snapshot

Over the past 12 months, PEXA shares have risen 26%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 11% over the same period.

View Original Announcement

The post PEXA Group posts 1H FY26 earnings 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 positions in and has recommended PEXA Group. The Motley Fool Australia has positions in and has recommended PEXA Group. 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.