The All Ordinaries Index (ASX: XAO) telco stock Superloop Ltd (ASX: SLC) beat market expectations on its profitability. But the business has dropped heavily in the last few days.
Experts at Macquarie Group Ltd (ASX: MQG) think the business could be one to watch in the next year, based on the numbers and the commentary that the business revealed.
For investors unfamiliar with the business, Superloop is an Australian telecommunications company and internet services provider. It operates as a reseller of NBN broadband and an owner of a private fibre network. It also has a wholesale 'white label' broadband business, as well as operating an MVNO provider in the mobile network.
In the FY25 result for the 12 months to 30 June 2025, it reported revenue growth of 31% to $546.5 million, that underlying operating profit (EBITDA) grew 70% to $92.2 million, and net profit after tax (NPAT) improved $16 million to $1.2 million.
Superloop reported wholesale segment revenue growth of 62% to $29.9 million, and consumer segment revenue growth of 37% to $99.1 million. Its NBN market share climbed 75% in FY25, taking it to 6.6%, according to the ACCC NBN wholesale market indicators report for the three months to March 2025.
What does Macquarie make of the ASX All Ords telco stock?
Macquarie said the FY25 result raised questions about the consumer segment, with slowing additions, particularly given strong market expectations going into the 'NBN Speed Bestowal' event in September.
On the positive side, the company's EBITDA of $92.2 million slightly beat market expectations, driven by lower costs.
While there was a stronger trading update for FY26, which implied around 135,000 additions per year, Macquarie remains cautious on the trading update because of a few different factors:
1) It indicates a potential increase in NBN market pricing irrationality – as SLC's Exetel One & ABB's Buddy are now discounting into the event (and driving customer growth), and 2) The level of promotional spend used to generate the strong YTD FY26 update is unknown. We look through near-term fluctuations in growth (both positive & negative), to the overall structural growth of the business (noting that the latest ACCC market share data still indicated that SLC has been ~2x its existing market share in Net Adds, largely from higher-priced incumbent Telcos. Origin adds were also strong over FY25, driving earnings in Wholesale.
However, the broker also noted that the result indicates a "strong Smart Communities pipeline is emerging", with 42,000 lots in-construction. Macquarie thinks there could be "considerable" gross profit upside from this area, alongside management commentary around an average revenue per user (ARPU) stabilisation trend emerging in the business NBN market over FY26.
The analysts noted there was no formal earnings guidance for FY26, but the ASX All Ords telco stock is "on-track" to reach $700 million of annualised revenue and there's a target for an EBITDA margin of the "mid-to-high teens" by the end of the year.
Is the ASX All Ords telco stock a buy?
Macquarie has an outperform rating on the business and a price target of $3.60. A price target is where analysts think the share price will be trading in 12 months. Therefore, the broker suggests the All Ords ASX telco stock could rise 16% at the time of writing.
The broker concluded:
SLC's outlook remains positive, in our view – with Origin growth continuing at strong levels, and catalysts in the Consumer & Business segments. Downside risk is protected by a $30m net cash balance sheet (FY25).
