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.
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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.
