PEXA Group Ltd (ASX: PXA) shares have pulled back from their highs recently.
Is this a buying opportunity for investors?
Let's see what analysts at Macquarie Group Ltd (ASX: MQG) are saying about the property settlements technology company.
What is the broker saying?
Macquarie wasn't overly impressed with the company's performance in FY 2025, however it is willing to look beyond this for a number of reasons. It explains:
FY25 Operating EBITDA miss: While Operating EBITDA of $133.0m was -4% below VA Cons ($138.7m), we broadly look through these results, given 1) the weaker Exchange result was due to a ~50bps lower EBITDA margin of 55.0% (with lower margins preferable in the context of a pricing review); 2) UK results will remain volatile over the mediumterm given the ramp-up nature of the business; and 3) our belief that disappointing Digital results will incentivise management to divest these assets, allowing for greater focus on the core and value-driving PEXA platform. FY26E Core NPAT guidance of $5-15m was ~35% below Cons.
The broker also highlights that the UK business could be well-positioned to grow its market share significantly in the future and has lifted its estimates. It adds:
UK at a pivotal juncture: NatWest providing formal commitment to onboard volumes onto the platform, coupled with FCA approval providing credibility to PXA's offerings, provides significant incentives for other Tier 1 lenders to also onboard. While we temper near-term earnings in line with guidance, we lift terminal market share from ~22% to ~30%, reflecting greater conviction in the UK prospects.
Should you invest?
According to the note, the broker has reiterated its outperform rating on Pexa's shares with a $17.30 price target.
Based on its current share price of $15.62, this implies potential upside of 11% for investors over the next 12 months.
Commenting on its recommendation, Macquarie said:
Reiterate Outperform. Any formal commitments from additional Tier 1 lenders are likely to incentivise the other four Tier 1 lenders to onboard with PXA quickly, driving rapid market share gains.
Valuation: Our new SOTP-derived TP is $17.30 (changing from a DCF-based $14.72), to reflect the differing EPS prospects of each segment. Catalysts: Formal commitment from other Tier 1 lenders; Digital strategic review conclusion; ARNECC review Oct-25; NatWest onboarding 2H26; IPART pricing review 2H26.
