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MM’s opinion on MAD (Mader Group)

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MM’s opinion on MAD (Mader Group)

Dear MM, Your reports and Daily comments are indeed helpful to me for managing my investments. Right now, I have a question which I hope you can help. When I look at the recent report of MAD, it seems the results were quite satisfactory, with reasonable growth for all divisions and the projected growth for 2025 is 27.5%. However, the share price kept on dropping since the report was released. Do you know the reason? Have I misread or missed something? Thank you Gregory Hi Team, I'm looking at MAD and their past performance looks good with growing revenue, EPS and with low levels of debt. As a founder led business, with lots of skin in the game, is the recent share price pull back an opportunity to invest? Thanks Clive

Answer

Hi Guys,

In a nutshell we do like this $1bn WA based mining services business into current weakness. MAD has been hit hard after its FY result because the strong growth came in below the markets high expectations – the stocks now trading ~37% below its 2024 high.

  • FY25 guidance disappointed the market which had been positioned for more i.e. Mgt guided to NPAT of $57mn and Bell Potter for example were expecting $69mn.

From a valuation perspective MAD is now trading ~20% below its 5-year average P/E as recent growth is priced out of the stock, but we believe its solid business, making a steady profit and even rewarding investors with a small yield delivering reasonable value back around $5.

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Mader Group Ltd (MAD)
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