APM Human Services International Pty

APM: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$3.24	Pscn	Lhgfqryq

APM Human Services: Low Unemployment a Headwind but Shares Remain Undervalued

Shane Ponraj

Nov 13, 2023

We decrease our fair value estimate for no-moat APM Human Services by 7% to AUD 2.70. We cut our EBIT forecasts by 7% on average over the next 10 years, largely driven by lower forecast revenue from higher-margin Australia and United Kingdom segments. We are more pessimistic relative to our prior forecasts given the potential underperformance of APM Human Services' recent contract wins and acquisitions, labor shortages in the company's health segment, and continued low levels of unemployment resulting in the Australian government currently reviewing disability and employment sectors.

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