Netwealth Group Ltd
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
A$55.70 | Rbhsx | Rftpcykk |
Netwealth Increasingly Overvalued As Its Share Price Shoots Higher
We have maintained our fair value estimate for Netwealth at AUD 6.00 per share following its fiscal 2020 result and, at the current market price of AUD 14.22, continue to believe the stock is significantly overvalued. We have slightly increased our cost growth assumptions but the negative impact on our fair value estimate has been offset by the positive time value of money impact since our last update. Our fair value estimate implies a fiscal 2021 price/earnings ratio of 26 and dividend yield of 2.7%, or 3.8% including franking credits. In contrast, the share price implies a P/E ratio of 61, and dividend yield of 1.1%, or 1.6% including franking credits.