The average target price of JDO.AX is 2.0 and suggests 17% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 2.6. This translates into 51% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 1.4. This is equivalent to 22% downside potential in the worst case. 

Judo Capital Holdings Limited provides various banking products and services for small and medium businesses in Australia. It accepts term deposits; and provides business loans, lines of credit, home loans, asset financing, equipment loan, and bank guarantees. The company was incorporated in 2016 and is based in Southbank, Australia.

Australia

Judo Capital Holdings Limited

Financial Services

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

JDO.AX reported revenue of AUD 385mn in the last 12 months, down 25% from FY23. The institution earned AUD 175 mn of interest before provisioning and taxes (IBPT) in the trailing 12 months (TTM), growth of 7% from FY23 The dynamics of more stable income, as measure by recurring income before provisioning and taxes (RIBPT), were rather similar. EPS fell 25% from FY23 to AUD 0.06. Market expects EPS to reach AUD 0.08 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 7ppts over six months and grown 3ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

Judo Capital Holdings Limited reported a return on equity (RoE) of 4.1% in the last 12 months, down from 4.6% in FY24. The market consensus projects a RoE of 5.8% in FY25.

Another important profitability metric, return on assets (RoA), amounted to 0.5% in the last 12 months, a decrease from 0.6% in FY24. The market analysts predict that RoA will be 0.7% in FY25.

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

JDO.AX has average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is very unstable and becomes extremely unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. 

No other major risks have been identified.

The solvency (credit quality) of JDO.AX is very low. The credit profile rests on (a) a substandard capital position, (b) weak asset quality, (с) a moderate corporate governance framework, (d) moderate earnings power and cost efficiency, and (e) its weak liquidity profile. We draw special attention to the rather low capital adequacy, fairly low asset quality driven by low loss absorption capacity, fairly weak liquidity position, which could instantly become a critical factor in the case of an unexpected bank run.

In highly turbulent market conditions, JDO.AX is moderately volatile. In other words, the stock will fall more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be moderate. 

In normal market circumstances, JDO.AX is moderately volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move slightly wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to mild. We would also like to highlight the mild intraday volatility of the instrument. 

Considering past and projected metrics, the stock is moderately 'expensive' compared to its peers. In particular, the stock is overpriced on P/E. 
	Editor's note: P/CR is Price to Core Revenue (CR), similar to P/S for corporates. CR = Net interest income + Net fee & commission income. P/IBPT is Price to Income Before Provisioning and Taxes (IBPT), similar to EV/EBITDA for corporates. IBPT = Core revenue -- Operating expenses + Non-recurring income. P/RIBPT is Price to Recurring Income Before Provisioning and Taxes (RIBPT), similar to P/FCF for corporates. RIBPT = Core revenue -- Operating expenses. 

Judo Capital Holdings Limited

A$ 1.72

3

Judo Capital Holdings Limited

A$ 1.72

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

A$ 1.72

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