Netwealth Group Ltd (ASX: NWL) shares were on form on Wednesday.
The ASX 200 stock ended the session 13.5% higher at $25.35.
This was driven by the release of the investment platform provider's half-year results.
Image source: Getty Images
Is it too late to invest?
The team at Bell Potter doesn't believe it is too late for investors to snap up this ASX 200 stock.
It was impressed with the company's results, stating:
NWL delivered a solid 1H26 result ahead of expectations, with revenue growth more advanced. Outlook guidance was reissued. NWL is tracking to its net inflow parameter with +10% run-rate growth support. Language now incorporates confidence into outer years, factoring in the broker segment pipeline as well.
One highlight was its cash conversion, which improved notably on the prior corresponding period. Bell Potter said:
Cash conversion was better than pcp despite slight build in the working capital. Free cashflow improved with +$60.3m inflow. This compares to +$47.7m in the pcp. NWL declared a fully franked dividend of 21¢ps which increased +20% pcp. Pro-forma adjustments for the $70m of debt drawn post balance date sees modest leverage (0.1x EBITDA). NWL provided strong dividend guidance, based on underlying earnings despite the loss booked and borrowings. The facility is subject to financial covenants and matures March 2028.
And lastly, the broker highlights that management spoke positively on its outlook and has reaffirmed its net inflows guidance. It adds:
NWL reaffirmed its outlook, guiding to net inflows comparable to FY25, an EBITDA margin of 49% and $12m in capitalised software. Net accounts added are at record levels and present lower balances, diluting existing accounts that sit on higher balances. Platform advisers expanded +118 (+52 pcp.). NWL provided an update on the net inflows which were +$1.6bn (+$1.5bn pcp.) so far. Extrapolating the run-rate would return a soft estimate (seasonality). Linearly this is in-line with our forecast.
Time to buy this ASX 200 stock
According to the note, the broker has retained its buy rating and $30.00 price target on Netwealth's shares. Based on its current share price of $25.35, this implies potential upside of 18% for investors over the next 12 months.
In addition, a dividend yield of 1.8% is expected in FY 2026, which stretches the total potential return to approximately 20%.
Bell Potter concludes:
Our Buy rating is unchanged. There were no surprises from the result that challenged the view momentum is building. We make +4% EPS upgrades contained to FY26.
