Morningstar

Humm Group Ltd HUM

Morningstar Rating
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Stock XASX Rating as of
A$0.87 −0.02 (2.26%)
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As of Delayed Price Closed

Company Report

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Humm Earnings: Result Beats Expectations, but Market Excitement Is Premature

Shaun Ler

While no-moat Humm's fiscal 2024 results exceeded expectations, we think the fundamentals haven't improved as much as the share price reaction suggests. Normalized net profit after tax of AUD 61 million fell 19% from the prior year, but was still 63% above our forecast of AUD 37 million. The beat primarily came from lower expenses, driven by cost reductions in the point-of-sale payments segment, and lower impairments, now at a five-year low of 2.1% of average receivables and loans.

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Price vs Fair Value

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HUM is trading at a 41% premium.
Price
A$0.86
Fair Value
A$4.23
Uncertainty
Very High
1-Star Price
A$6.51
5-Star Price
A$7.29
Economic Moat
Chrmc
Capital Allocation
Pwmkdzdb

Bulls Say, Bears Say

Bulls

Humm’s broad product portfolio brings a large addressable market, which gives it significant opportunity to increase if management’s turnaround strategy proves successful.

Bears

The level of complexity and overlap between Humm’s products could create friction with customers and discourage product uptake.

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Trading Information

Previous Close Price
A$0.89
Day Range
A$0.84–0.89
52-Week Range
A$0.39–0.90
Bid/Ask
A$0.83 / A$0.87
Market Cap
A$425.04 Mil
Volume/Avg
4.4 Mil / 982,067

Key Statistics

Price/Earnings (Normalized)
31.21
Price/Sales
0.70
Dividend Yield (Trailing)
2.31%
Dividend Yield (Forward)
2.89%
Total Yield
4.66%

Company Profile

Humm is a diversified finance provider with offerings centered on buy now pay later, or BNPL, credit cards and equipment finance. It facilitates purchases for over 2.7 million customers. Humm operates in Australia, New Zealand, Ireland, and Canada. While it caters for a diverse range of industries, its focus is on financing higher ticket items. Unlike the glut of new BNPL firms, Humm is established with a long operating history. Originally Flexigroup, Humm had a strategic refresh in 2019 where it has now consolidated to around four main brands in ANZ, from 20 before. In its earlier days, Humm focused on Visa and interest-free cards, lay-by, consumer leasing, commercial finance, and other payment solutions to consumers and small businesses.
Sector
Financial Services
Industry
Credit Services
Stock Style Box
Small Value
Total Number of Employees
—
Website
https://www.shophumm.com

Comparables

Valuation

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Metric
HUM
CCP
LFS
Price/Earnings (Normalized)
 31.2121.507.53
Price/Book Value
 0.721.300.97
Price/Sales
 0.702.712.29
Price/Cash Flow
 ———
Price/Earnings
HUM
CCP
LFS

Financial Strength

Metric
HUM
CCP
LFS
Quick Ratio
 1.075.971.09
Current Ratio
 1.086.131.13
Interest Coverage
 1.033.77−1.71
Quick Ratio
HUM
CCP
LFS

Profitability

Metric
HUM
CCP
LFS
Return on Assets (Normalized)
 1.18%4.01%2.02%
Return on Equity (Normalized)
 10.22%6.33%11.90%
Return on Invested Capital (Normalized)
 6.04%5.78%−3.76%
Return on Assets
HUM
CCP
LFS

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