Tag: Stock pick

Shares in Judo Capital Holdings Ltd (ASX: JDO) got a nice little bump from the company’s strong first-half profits released this week, but have subsequently given back all of the gains.

With a longer-term view in mind, we’ve canvassed the opinions of three brokers on where the shares could go from here, and the consensus is that the company is undervalued at current prices.

More on that later. First off, what did the company report this week?

Profits surging

Judo said in its statement to the ASX this week that net profit had come in at $59.9 million, up 32 per cent on the prior half and up 46% compared with the same period the previous year.

The junior bank said it had delivered “above system growth” with gross loans and advances of $13.4 billion, up 7% over the half and 15% year on year, driven, the company said, by its, “differentiated customer value proposition and improved productivity”.

Judo also reaffirmed its guidance for full year, pre-tax profits of $180-$190 million.

Chief executive officer Christopher Bayliss said regarding the result:

Today’s result demonstrates that Judo continues to successfully execute against its clear and simple strategy. 2026 is a significant milestone for Judo, marking our 10th year as Australia’s first specialist SME business bank. Over this time, not only have we validated the strong demand for a differentiated, relationship-based approach to SME lending, we have demonstrated the agility of our model and our team’s ability to successfully execute our strategy. Following major investment in Judo’s systems and people, we have built the bank we dreamed of and are now scaling our business and progressing towards our goal of delivering a sector-leading return on equity.

Mr Bayliss added the bank was continuing to expand into regional and agribusiness lending.

Shares looking undervalued

Among the brokers, Morgan Stanley has the most bullish share price target for Judo, at $2.20 per share, compared with $1.80 on Wednesday.

The Morgan Stanley team said good volume growth, an upgrade to margin guidance and evidence of increased operating leverage provided more confidence in Judo’s 2-year earnings outlook.

Meanwhile at Morgans they have a price target of $2.09 on Judo shares, but added there could be some serious upside further down the track.

They added:

Judo does not intend paying dividends as it retains capital to support its significant loan growth aspirations. As such, investors in Judo are entirely reliant on capital growth to achieve their total return objective. While Judo is higher risk than major banks given it is a challenger operating entirely in the SME business banking space, we expect capital appreciation will be driven by stellar earnings growth across FY26-27 in particular. By the end of this decade we think Judo may be worth close to $3/share.

And finally, the team at Macquarie has a price target of $2.05 per share for Judo.

They said the company was executing well and delivering on growth, and they have an outperform rating on the shares.

Judo was valued at $2.12 billion at the close of trade on Tuesday.

The post Are Judo Capital shares a buy, sell or hold after their results this week? appeared first on The Motley Fool Australia.

More reading

• Why BHP, JB Hi-Fi, Judo Capital, and PEXA shares are storming higher today
• Why is the Judo share price surging 12% on Tuesday?
• Judo Capital: profit surges 32% and loan growth outlook rises
• ASX bank shares: One I’d buy and one I’d avoid
• Forget CBA shares: I’m buying shares in another Aussie bank

This February’s earnings season is continuing with gusto this week. We’ve heard from another round of popular ASX 200 shares over the last few days, with good, bad, and ugly results all around. This morning, Lottery Corp Ltd (ASX: TLC) joined the throng with its own earnings report card. And it’s an interesting one to read for investors who might want to buy Lottery Corp shares for dividends.

Lottery Corp has long been a top choice for ASX investors looking for defensive earnings and a stable dividend. After all, this company has exclusive licenses to run the perennially popular lottery and Keno games in most states and territories. These services tend to be highly resilient to economic maladies like inflation and recessions, given the enduring appeal of the chance to hit the jackpot.

So let’s see how this company lived up to that reputation with its latest earnings and dividend, covering the six months to 31 December 2025.

As we covered this morning, it was a bit of a mixed bag for Lottery Cop over the second half of last year. The company told investors that it suffered its least-favourable period for jackpot outcomes since its 2022 spinoff from Tabcorp Holdings Ltd (ASX: TAH). Revenues were up 2% year on year to $1.82 billion. However, the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 0.7% from the same period in 2024 to $367 million. Net profit after tax (NPAT) was also lower, falling 1.4% to $173.3 million.

Earnings per share (EPS) came in at 7.8 cents per share, a drop of 0.1 cents (or 1.3%) from the previous period.

Despite this, investors seem to be relieved. That’s going off the current Lottery Corp share price, which is up a healthy 4.17% at the time of writing to $5.38.

What does the latest Lottery Corp dividend look like?

But let’s talk dividends.

Lottery Corp has revealed that its first dividend of 2026 will come in at 8 cents per share. As is the company’s habit, it will come with full franking credits attached. This interim dividend matches last year’s equivalent payout, also worth 8 cents per share. Together with the final dividend, worth 8.5 cents per share, that was paid out in September of last year, it keeps Lottery Corp’s full-year payouts at 16.5 cents per share.

Lottery Corp has nominated 25 February (next Wednesday) as this payout’s ex-dividend date. So if any investor doesn’t yet own Lottery Corp shares but wishes to receive this dividend, they will need to have shares in their name by market close on 24 February. The dividend pay day has then been set for 26 March next month.

Perhaps concerningly for investors, the interim dividend that was announced today represents a payout ratio of 103% of earnings. That’s something you may have clocked, given that Lottery Corp’s EPS for the period was just 7.8 cents per share. Perhaps this can be excused, given the apparently erroneous dip in jackpot conditions. However, the company did pay out 100% of its earnings as dividends over the full 2025 financial year. This indicates that it is hitting its speed limit when it comes to dividends. So income investors should certainly keep an eye on Lottery Corp’s financials over the rest of 2026.

Lottery Corp shares are currently trading on a (trailing and forward) dividend yield of 3.07%.

The post Here’s everything you need to know about the new Lottery Corp dividend appeared first on The Motley Fool Australia.

More reading

• Why Lottery Corp, NAB, Netwealth, and TechnologyOne shares are charging higher today
• The Lottery Corporation posts steady earnings and dividend for 1H26
• 5 things to watch on the ASX 200 on Wednesday
• Looking for income? Check out these buy-rated ASX dividend stocks
• 3 quality ASX shares to buy with $10,000

Motley Fool contributor Sebastian Bowen 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 The Lottery Corporation. The Motley Fool Australia has recommended The Lottery Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

HUB24 Ltd (ASX: HUB) reports its half-year results tomorrow, and with rival Netwealth Group Ltd (ASX: NWL) delivering a standout set of numbers today, expectations are building.

Netwealth shares are up 12% after it announced its half year results today, and HUB24 shares are up around 3% today (at the time of writing) likely reflecting optimism that it too could deliver strong results tomorrow.

HUB24 has already given investors a glimpse of its platform momentum and so the question for tomorrow is how well those flows convert into revenue and profit growth.

Solid platform net inflows

In January, HUB24 reported record half-year platform net inflows of $10.7 billion and quarterly inflows of $5.6 billion. Total funds under administration (FUA) reached $152.3 billion at 31 December 2025, up 26% on the prior corresponding period, with platform FUA up 29%.

The business also continued to grow its adviser base, with active advisers increasing 8% year-on-year to 5,277.

The growth engine is clearly firing but the question for tomorrow’s result is how well that 29% FUA growth is translating into uplift in revenue and EBITDA and whether margins remain resilient as the company continues investing in its product.

Netwealth a good test case

Netwealth demonstrated how strong FUA growth can drive both revenue expansion and margin stability. HUB24 now faces a similar test tomorrow.

HUB24’s model, like Netwealth’s, benefits from increasing platform net inflows but fee mix, pricing discipline, and competitive dynamics all play a role in how effectively flows convert into earnings.

Structurally, the tailwinds in the industry remain strong and adviser-led flows continue to shift toward technology-enabled platforms with HUB24, Netwealth and Macquarie Group Ltd (ASX: MQG) being clear beneficiaries.

Share price snapshot

HUB24 shares have had a volatile run over the past year. At one point over the past 12 months, HUB24 shares were up 40%, before dropping 26% from their October 2025 peak. This reflects the broader sentiment swings in high-multiple financial technology stocks. Today’s 3% rise however suggests investors are positioning for a potentially strong result tomorrow.

Its hard to tell how much of that is already priced in but if HUB24 can consistently increase its FUA whilst translating that into strong revenue and earnings growth, long-term investors will likely have much to be happy about.

Tomorrow’s result will be a key progress marker in that journey.

The post Can HUB24 match Netwealth’s stellar results tomorrow? appeared first on The Motley Fool Australia.

More reading

• Why Lottery Corp, NAB, Netwealth, and TechnologyOne shares are charging higher today
• Netwealth shares surge 12% as record inflows power earnings growth
• Do experts think the Macquarie share price is a buy?
• Netwealth earnings: 24% revenue jump and record inflows
• Where to invest $10,000 in ASX shares right now

Motley Fool contributor Kevin Gandiya has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24, Macquarie Group, and Netwealth Group. The Motley Fool Australia has positions in and has recommended Macquarie Group and 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.

Suncorp Group Ltd (ASX: SUN) shares are having a poor session on Wednesday.

In afternoon trade, the insurer’s shares are down 5% to $15.12.

Why are Suncorp shares sinking?

Investors have been selling the company’s shares today after it released its half-year results.

The market appears disappointed after Suncorp reported a sharp drop in profit for the six months ended 31 December, weighed down by elevated natural hazard costs and weaker investment returns.

According to the release, Suncorp posted a net profit after tax of $263 million for the half, down significantly from $1.1 billion in the prior corresponding period. Cash earnings came in at $270 million, compared to $828 million a year ago.

The key culprit was natural disasters.

Natural hazard costs surge

Management revealed that it dealt with nine declared natural hazard events during the half, resulting in more than 71,000 claims at a net cost of around $1.3 billion.

Natural hazard costs were $453 million above the half-year allowance, driven largely by destructive thunderstorms and widespread hailstorms across Australia’s east coast, particularly in south-east Queensland.

Net incurred claims jumped 23.4% to $5.48 billion, reflecting both the severe weather events and ongoing claims inflation in parts of the portfolio.

The key Consumer Insurance division swung to an insurance trading loss of $137 million, compared to a $509 million profit in the prior period, largely due to the elevated natural hazard experience.

Suncorp’s CEO, Steve Johnston, said:

While Suncorp’s 1H26 reported profits and shareholder returns have been challenged by an elevated level of natural hazard costs and lower investment returns over the half, our underlying business remains resilient as we continue to deliver on our strategic imperatives and drive good momentum leading into the second half of the financial year.

Investment returns and margins

Suncorp also revealed that its net investment income fell to $259 million from $374 million a year ago. It was impacted by negative mark-to-market movements from higher yields.

Despite this, underlying margins held up relatively well. The underlying insurance trading ratio (UITR) came in at 11.7%, towards the top half of the group’s 10% to 12% target range.

Gross written premium increased 2.7% to $7.69 billion, supported by strong growth in the Consumer portfolio, particularly in Motor and Home.

Capital and dividend

On a more positive note, Suncorp maintained a strong capital position, with Common Equity Tier 1 capital sitting $700 million above the midpoint of its target range.

The board declared a fully franked interim dividend of 17 cents per share, representing 68% of cash earnings.

The company also completed $168 million of its on-market share buy-back program during the half and continues to target around $400 million in buy-backs over FY26.

Outlook

Looking ahead, management expects gross written premium growth to be around the bottom of the mid-single digit range, given current market conditions in Commercial insurance.

The underlying insurance trading ratio is expected to remain in the top half of the 10% to 12% range, supported by pricing momentum in Consumer and Commercial & Personal Injury portfolios.

The post Why are Suncorp shares sinking 5% today? appeared first on The Motley Fool Australia.

More reading

• Why Baby Bunting, Capstone Copper, Healius, and Suncorp shares are falling today
• Suncorp Group posts resilient 1H26 earnings despite higher claims
• 5 things to watch on the ASX 200 on Wednesday
• ANZ Group posts $1.94b cash profit as costs drop in 1Q26
• Are Suncorp or QBE shares a better buy after yesterday’s sell-off?

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 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.

Yesterday’s earnings report from mining share BHP Group Ltd (ASX: BHP) was one of the most spectacular reports we have seen so far in this February’s earnings season. Given its size and impact on the entire S&P/ASX 200 Index (ASX: XJO), BHP’s numbers (and dividend) are always an ASX watercooler topic. But this one was particularly impactful.

As we covered yesterday, the mining giant reported an 11% increase in revenues to US$27.9 billion. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were up 25% to US$15.46 billion, while underlying profits spiked 22% to US$6.2 billion. Statutory profits rose 28% to US$5.64 billion.

It was a momentous report from the ‘Big Australian’ on another level, too. Over the six months to 31 December, BHP’s copper division contributed more than half of the company’s entire earnings. That’s a notable development for a company that has traditionally been known for its iron ore operations.

But perhaps the most exciting piece of news from this earnings report was the revelation of BHP’s next dividend.

BHP unveiled an interim dividend of 73 US cents per share for the period. As with almost all BHP dividends, this one will come fully franked.

This dividend represents a 46% hike over the interim dividend of 50 US cents per share that investors received this time last year. It’s also a 21.67% rise over the 60 US cents per share final dividend from September.

It is the highest dividend BHP shareholders will receive since the final dividend of 2024, worth 74 US cents per share.

So are BHP shares a buy for dividend income?

We don’t yet know exactly how much this latest dividend will be worth in Australian dollar terms yet. However, at today’s exchange rates, investors should expect around $1.03 per share. This would take BHP’s full-year payouts to $1.95 per share.

That would give BHP shares a forward dividend yield of 3.76%, up from the current trailing yield of 3.3%.

So are BHP shares a buy for dividend income? Well, when it comes to mining stocks, I always tend to think of the dividend potential as ‘feast and famine’. When commodity markets are riding high, BHP’s low costs can result in some monstrous dividends. Investors may still fondly recall the annual total of $4.63 per share that the miner paid out back in 2022.

But those dividends can dry up just as quickly. In 2018, for example, BHP doled out just $1.18 per share over the whole year.

As such, I think BHP is a useful income stock, but only part of a well-diversified dividend portfolio. Investors should always be prepared for plenty of ups and downs when it comes to this company.

The post After a 46% dividend hike, are BHP shares a buy for income? appeared first on The Motley Fool Australia.

More reading

• What’s next for the BHP share price?
• Here are the top 10 ASX 200 shares today
• BHP share price breaks records on US$4.3b silver agreement
• Here’s everything you need to know about the latest BHP dividend
• Why BHP, JB Hi-Fi, Judo Capital, and PEXA shares are storming higher today

Motley Fool contributor Sebastian Bowen 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 BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another gain. At the time of writing, the benchmark index is up 0.35% to 8,992 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are pushing higher.

Lottery Corporation Ltd (ASX: TLC)

The Lottery Corporation share price is up 5% to $5.42. Investors have been buying this lottery company’s shares following the release of its half-year results. The company posted a 2% increase in revenue to $1.82 billion and a 1.4% decline in net profit after tax to $173.3 million. Despite this, the Lottery Corporation’s board elected to maintain its fully franked interim dividend at 8 cents per share.

National Australia Bank Ltd (ASX: NAB)

The NAB share price is up almost 5% to $47.47. This has been driven by the release of the banking giant’s quarterly update this morning. NAB reported cash earnings of $2.02 billion for the three months. This is up 15% compared to the average quarterly result in the second half of FY 2025. NAB’s CEO, Andrew Irvine, said: “We have started FY26 strongly. Underlying profit rose 12% compared with the 2H25 quarterly average, driven by increases across each of our customer facing divisions and a supportive Australian economic environment. Pleasingly, asset quality outcomes also improved over 1Q26 and we have maintained appropriate balance sheet settings.”

Netwealth Group Ltd (ASX: NWL)

The Netwealth share price is up almost 13% to $25.15. This follows the release of the investment platform provider’s half-year results. Netwealth reported a 24.7% increase in revenue to $193.8 million and a 19.9% lift in net profit after tax to $69 million. The good news is that its CEO and managing director, Matt Heine, appears confident the strong form can continue. He said: “Netwealth enters this half with strong momentum, continued business growth, and increasing traction across the market and a strong pipeline of new opportunities.”

TechnologyOne Ltd (ASX: TNE)

The TechnologyOne share price is up 6% to $23.02. This morning, the enterprise software provider upgraded its guidance for FY 2026. TechnologyOne revealed that it now expects profit before tax growth of 18% to 20% this year. This is up from its previous guidance range of 13% to 17%. The company’s CEO, Ed Chung, said: “SaaS+ and our products turbocharged through AI are our not so secret weapons, giving us the confidence to increase PBT growth to 18% to 20%, upgraded from our prior range of 13% to 17%, as well as guiding to ARR growth of 16% to 18%. We are targeting the top end of the guidance range for both PBT and ARR.”

The post Why Lottery Corp, NAB, Netwealth, and TechnologyOne shares are charging higher today appeared first on The Motley Fool Australia.

More reading

• Here’s everything you need to know about the new Lottery Corp dividend
• Can HUB24 match Netwealth’s stellar results tomorrow?
• Why Technology One shares are surging 7% today
• Netwealth shares surge 12% as record inflows power earnings growth
• NAB shares race to record high on strong Q1 update

Motley Fool contributor James Mickleboro has positions in Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netwealth Group, Technology One, and The Lottery Corporation. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool Australia has recommended Technology One and The Lottery Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Challenger Ltd (ASX: CGF) shares have rocketed 6.08% higher in lunchtime trade on Wednesday. At the time of writing the shares are changing hands for $8.72 a piece in what is a stark turnaround from earlier this week.

February so far has been filled with volatility for the Australian investment management company. The share price crashed 10% between Wednesday last week to the close of the ASX yesterday afternoon. And now it is rocketing back up.

For the year-to-date Challenger shares are down 8.23% but they’re 55.91% higher over the year.

What has caused so much share price volatility recently?

There’s been ongoing deal speculation about Challenger’s advanced talks about a joint acquisition of Pepper Money Ltd (ASX: PPM) alongside Pepper Group. 

The company said earlier this month that it thinks a potential acquisition could give Challenger long-term access to fixed income assets and support its strategic growth plans. The news caused a temporary share price spike to Wednesday last week. But then concerns about how the deal would be executed caused some investors to sell up their shares towards the end of the week.

Why are Challenger shares climbing higher today?

Challenger posted its first half FY26 results ahead of the ASX open yesterday morning. It revealed an enormous statutory net profit after tax (NPAT) of 369% to $339 million for the period and a 2$ increase in normalised NPAT to $229 million.

The group also announced a fully franked dividend increase of 7% to 15.5 cents per share.

The results weren’t enough to shift investor sentiment. The share price closed 0.49% lower at the end of the day on Tuesday.

There is no more price-sensitive news out of the company today, so it looks like today’s share price hike is a delayed investor reaction to yesterday’s profits and dividends announcement. 

Are Challenger shares a buy, sell or hold following its results?

Analysts continue to be pretty optimistic about the outlook for Challenger shares, and this is especially supported by strong-than-anticipated financial results yesterday. 

TradingView data shows that seven out of 10 analysts have a buy or strong buy rating on the shares. Another three have a hold rating.

The average target price is $9.50 which, even after today’s rally, implies a 9.07% upside at the time of writing.

Some analysts are more bullish and expect a share price hike to $10 a piece. That implies a 14.81% potential upside at the time of writing on Wednesday lunchtime. 

The post Challenger shares storm 6% higher today. Is it too late to buy? appeared first on The Motley Fool Australia.

More reading

• Challenger earnings: Statutory NPAT surges 369% in H1 FY26
• Why Bravura, CAR Group, Pepper Money, and Web Travel shares are storming higher
• Why Bougainville Copper, Brainchip, Challenger, and HMC Capital shares are falling today
• Pepper Money shares pop 25%, Challenger slips 3% on take-private deal
• Challenger flags talks on Pepper Money acquisition

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Challenger. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is on form again and pushing higher. At the time of writing, the benchmark index is up 0.4% to 8,994.2 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are falling:

Baby Bunting Group Ltd (ASX: BBN)

The Baby Bunting share price is down 3.5% to $2.30. This morning, analysts at Morgans reaffirmed their hold rating on this baby products retailer’s shares with a trimmed price target of $2.60. The broker said: “BBN’s 1H26 pro-forma NPAT was up 4.1% yoy to $5.0m which was in the middle of guidance range ($4.5-$5.5m) driven by comps sales growth, gross margin expansion offset by higher costs. Nine stores have been refurbished to the new store design, and have performed strongly, sales up 25%, which is at the upper end of guidance range of 15-25%. FY26 NPAT guidance has been narrowed to $17.5-$19.5m (was $17-20m). We have made minor changes to forecasts. We have a $2.60 target price (was $2.70) Hold recommendation retained.”

Capstone Copper Corp (ASX: CSC)

The Capstone Copper share price is down 18% to $12.78. This follows the release of the copper miner’s guidance for 2026. Capstone Copper expects consolidated copper production of between 200,000 and 230,000 tonnes in 2026. This is broadly in line with 2025 levels. Management also advised that it expects consolidated C1 cash costs of US$2.45 to US$2.75 per payable pound of copper in 2026. This is an increase compared to 2025, primarily due to modest inflation and lower-grade ore at Mantos Blancos and Pinto Valley driven by mine sequencing.

Healius Ltd (ASX: HLS)

The Healius share price is down 11% to 72.7 cents. This morning, this healthcare company released its half-year results and reported a 3.8% increase in group revenue to $688.1 million and underlying EBIT of $7.9 million. The latter was up from a loss of $2.7 million a year ago. While management expects to achieve earnings in line with consensus estimates in FY 2026, it warned that its revenue and profitability will be skewed towards the second half. This is due to both the timing of cost savings and normal volume seasonality factors. The market appears sceptical that it will deliver on this guidance.

Suncorp Group Ltd (ASX: SUN)

The Suncorp share price is down 5% to $15.19. Investors have been selling this insurance giant’s shares following the release of its half-year results. Suncorp reported a net profit after tax of $263 million, which is down heavily from $1.1 billion a year earlier. The company’s CEO, Steve Johnston, said: “While Suncorp’s 1H26 reported profits and shareholder returns have been challenged by an elevated level of natural hazard costs and lower investment returns over the half, our underlying business remains resilient as we continue to deliver on our strategic imperatives and drive good momentum leading into the second half of the financial year.”

The post Why Baby Bunting, Capstone Copper, Healius, and Suncorp shares are falling today appeared first on The Motley Fool Australia.

More reading

• Why is this ASX 200 copper stock crashing 19%?
• Suncorp Group posts resilient 1H26 earnings despite higher claims
• 5 things to watch on the ASX 200 on Wednesday
• Why Baby Bunting shares are jumping 10% today
• ANZ Group posts $1.94b cash profit as costs drop in 1Q26

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 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.

Technology One Ltd (ASX: TNE) shares are pushing higher on Tuesday.

The move comes after the enterprise software company released an update at its annual general meeting (AGM).

In early afternoon trade, the Technology One share price is up 7.04% to $23.25. By comparison, the S&P/ASX All Technology Index (ASX: XTX) is 0.57% higher.

Despite today’s rebound, the stock remains down around 17% in 2026 to date. It has been caught up in the broader sell-off across global technology names linked to artificial intelligence (AI) concerns and valuation resets.

Here’s what the company told investors.

FY26 outlook lifted at AGM

At its AGM, Technology One announced an upgrade to its FY26 guidance.

Management now expects profit before tax (PBT) growth of between 18% and 20%, up from its prior guidance range of 13% to 17%.

The company also upgraded its annual recurring revenue (ARR) growth guidance to 16% to 18%.

According to CEO Ed Chung, the upgraded outlook reflects confidence in the group’s customer pipeline across Australia, New Zealand, and the UK, as well as momentum in its SaaS+ strategy.

Chung noted that Technology One has a long track record of delivering at the top end of its guidance ranges. He added that the business does not upgrade guidance lightly and only does so when it has strong visibility in the numbers.

The company highlighted that its first-half PBT growth is expected to be in the high single digits. A stronger second-half is anticipated as investments in AI showcase events and product launches begin to contribute.

From SaaS to SaaS+

Technology One reiterated that it has transitioned from being a SaaS business to what it calls a SaaS+ model.

Under this approach, the company provides an integrated enterprise software solution as a service (SaaS), including implementation, support, and ongoing upgrades, rather than just software licences.

The group services more than 1,300 organisations across government, education, and corporate sectors. It remains one of the ASX 100’s larger technology companies, with a market capitalisation of about $7.6 billion.

Key dates ahead for investors

Investors will not have to wait long for more details.

Technology One is scheduled to release its half-year results on 19 May 2026. That update should provide greater clarity on first-half earnings, ARR growth, and margins.

In the meantime, the company also confirmed the retirement of long-serving Non-Executive Director Clifford Rosenberg, who has served on the board for 7 years.

With upgraded guidance now in place, attention will shift to whether Technology One can continue to deliver double-digit earnings growth in a tougher technology market.

The post Why Technology One shares are surging 7% today appeared first on The Motley Fool Australia.

More reading

• TechnologyOne upgrades earnings guidance on AI and SaaS+ momentum
• 3 ASX ETFs to target if you anticipate a tech turnaround 
• Why this top fundie is doubling down on ASX 200 tech stocks like TechnologyOne and Xero shares
• Why are ASX 200 tech shares down 43% in six months?
• 3 ASX shares I’d buy and hold through market volatility

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

Shares in ASX small-cap stock Step One Clothing Ltd (ASX: STP) have fallen 12% on Wednesday (at the time of writing) after the online underwear retailer announced a statutory loss for the first half of FY 2026, weighed down by a large inventory provision and weaker sales.

The result marks a sharp reversal from the prior corresponding period and underscores the challenges facing the business as it executes a strategic reset.

What did Step One report?

Step One reported revenue of $36.3 million for the six months to 31 December 2025, down 24.5% on the prior corresponding period.

The company posted an EBITDA loss of $10 million, compared to a profit of $11.2 million a year earlier, whilst statutory NPAT was a loss after tax of $8.5 million, versus a profit of $8.2 million in 1H25.

Gross margin fell sharply to 43%, down from 78% in the prior period, reflecting the inventory write-down.

What else do investors need to know?

The key driver of the result was the $10.9 million provision against aged and slow-moving inventory, despite promotional activity.

Accounting rules require inventory to be valued on the balance sheet at the lower of cost or net realisable value, and so this inventory write-down implies that the company’s legacy stock can likely only be sold at prices well below cost, despite clearance activity such as Black Friday promotions.

Encouragingly, the company ended the half with $24 million in cash and term deposits, whilst total liabilities were $8.4 million.

No interim dividend was declared. Dividends are expected to recommence once retained earnings return to a positive balance.

What did management say?

Founder and CEO Greg Taylor said sales in late 2025 were below expectations due to slower-than-expected clearance of legacy inventory.

He described the result as reinforcing the urgency of the company’s “reset program,” which includes moderating discounting, focusing on product innovation, and restoring brand perception.

Given the transition phase, management is not providing full-year earnings guidance.

Share price snapshot

Prior to today’s sell-off, Step One shares had already been under pressure amid slowing growth and margin compression. Today’s 12% drop reflects investor concern about the struggle to move inventory, along with declining revenue and margin contraction.

With the inventory provision now taken and the balance sheet still solid, investors will be watching closely to see whether the reset can stabilise sales and restore profitability in the second half.

Step One shares are down 80% over the past 12 months.

The post Step One shares plunge 12% as inventory write-down wipes out half-year profit appeared first on The Motley Fool Australia.

More reading

• Challenger shares storm 6% higher today. Is it too late to buy?
• Why Baby Bunting, Capstone Copper, Healius, and Suncorp shares are falling today
• Why Technology One shares are surging 7% today
• Why are CBA shares falling today?
• JB Hi-Fi shares jump 15% this week. What’s next?

Motley Fool contributor Kevin Gandiya has no positions 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.