UPDATE: PEXA Group Ltd (ASX: PXA) shares plunged 11% following its FY25 earnings results, raising questions about the stock’s value in a volatile market. Analysts suggest this may be an opportunity for investors to consider a buy as the company navigates through a challenging earnings season.
The ASX 200 has historically faced declines in September, often leading to heightened volatility as investors react to crucial financial data. This year, the aftermath of earnings season revealed significant disparities in performance across sectors. Notably, ASX gold stocks surged 20.1% in August, while healthcare stocks suffered losses.
PEXA Group, which operates a digital conveyancing platform for real estate transactions in Australia, reported a revenue of A$393.6 million, a 16% increase from the previous year. However, the company’s EBITDA of A$134 million and adjusted net profit after tax (NPATA) of A$41.1 million fell short of analyst expectations.
Despite the disappointing earnings, broker Morgans has upgraded its price target for PEXA to A$16.87, reflecting confidence in the company’s operational progress, particularly in the UK market. This new target suggests an 8% upside from yesterday’s closing price of A$15.62.
“Although the result headline figures missed expectations, we think FY25 saw meaningful operational progress,” Morgans stated.
In contrast, Bell Potter has set a more optimistic target of A$17.30, implying a potential jump of 10.7% for PEXA shares. Both analysts highlight that the stock may have been oversold following its earnings report.
PEXA’s new CEO, Russel Cohen, is implementing a more focused approach to capital investment, which could further enhance investor confidence. As the market reacts to these developments, many are watching to see if PEXA can recover from this significant dip.
Investors are advised to stay alert for further updates as PEXA navigates its path forward in a challenging economic landscape. With brokers recommending an “Accumulate” stance, it may be time for potential buyers to consider entering the market while the stock is at a lower price point.
In summary, PEXA Group’s recent earnings report has sparked a wave of investor activity, with analysts divided on the stock’s future. As the situation develops, the potential for recovery remains a focal point for market watchers.
