5 ASX stocks with the highest PE multiples and 5 ASX stocks with the lowest PE multiples!

5 ASX stocks with the highest PE multiples

Note: All figures are in AUD and for FY25 unless otherwise stated

Polynovo (ASX:PNV) – 154x (Share price of $2.12 vs EPS of $0.01)

PolyNovo is a biotech company behind a technology called NovoSorb. NovoSorb aids recovery in ailments where the body may struggle to rebuild its own cells, particularly severe burns. It is a 2mm thick biodegradable polymer foam wound scaffolding that provides faster and better results compared to skin grafts or lattice products. It provides a home for cells to migrate and disrupts the ability of collagen protein fibres to form knots and bundles.

PolyNovo had a solid FY24, recording $92m in NovoSorb sales which was over 50% higher than in FY23. Notwisthstanding that it has been FDA approved and commercially launched, it is conducting further clinical trials to allow for the expansion of its product portfolio and the consequential increasing of total addressable markets.

 

Telix (ASX:TLX) – 83x ($25.74 vs $0.31)

Sticking with biotechs, and Telix is not just any biotech but one of the biggest success stories. Telix’s flagship product is Illuccix, which is used for the imaging of prostate cancer and is FDA approved. It is working on a second product for imaging renal cancers, but for now, Illuccix is the primary source of its revenue. Telix’s revenues have kept growing exponentially ever since Illuccix was commercialised. Telix’s exponential sales growth has excited investors, although its continued investment into R&D minimises Earnings Per Share, leading it to have a high PE multiple. 

 

WiseTech (ASX:WTC) – 107.5x ($121.91 vs $1.13)

WiseTech may no longer have Richard White at the helm, but it is still trading at a high PE multiple.  WiseTech’s main product is CargoWise One, a Cloud-based end-to-end logistics execution platform that freight forwarders and other logistics companies can use to manage their businesses. The product is sold in a subscription model and is customisable to meet customer needs. It also has the Xtrade messaging solution, that lets suppliers and customers share information as well as transport management solutions for truckload shippers. The company made a profit of $262.8m (up 24%) and revenue of $1.04bn.

 

Nuix (ASX:NXL) – 106.5x ($6.20 vs $0.06)

Nuix has made a stellar recovery from its all time lows, hence the high PE multiple. Nuix developed an algorithm that enables unstructured data to be made searchable and provides the structure for more elaborate analysis. The algorithm was first developed as a use case for an Australian government agency, but has expanded into a broader forensics service called Nuix Engine, used by more than 1,000 customers in 78 countries.

The company’s shares have recovered as it put the legal dramas behind it, and recorded impressive results in the last 2 years. It promised ~15% ACV growth in FY25.

 

Xero (ASX:XRO) – 118.6x ($170.63 vs $1.44)

Xero is all about helping small & medium sized businesses do business. The company, which has over 3 million subscribers, primarily sells accounting software that helps businesses keep books, pay bills and send invoices. But it has gradually developed features useful beyond book-keeping, such as storing files, converting currencies, keeping track of inventories and creating professional quotes.

Xero believes it is just getting started. It believes the TAM (Total Addressable Market) is NZ$100bn and that is just the top 3 jobs its software is used for – Accounting, Payroll and Payments. Adjacent Tasks, including other tasks such as inventory, CRM and project management, could be another $39bn.

 

5 ASX stocks with the lowest PE multiples

Humm – 5.6x ($0.69 vs $0.12)

Many investors likely remember this company as a BNPL stock. Humm, which was known as FlexiGroup until mid-2020, was in the ‘payments by instalments’ space long before many of the other ASX plays. It still is in here, but it specialises in big ticket items.

But all along, it has had a commercial asset finance division, Flexicommercial. It has consistently been the second largest non-bank provider of asset finance, is profitable and currently possesses a growing loan book worth $2bn. Flexicommercial has been repositioned over the last five years and has a strategic position in the market, focused on sectors that commercial banks had stopped lending to, including agriculture and industrial sectors. Despite all of this, Flexicommercial was also disregarded by investors.

Humm closed FY24 with a total loan book of $5bn, up 18%. 60% of the book was commercial receivables and this segment grew by 26%. The company made a total return to shareholders of 6.02% taking into account its 2c per share dividend. The NIM was 5.5% and its Net Credit Loss/Average Net Receivables was 1.8%. The bottom line was solid as well.

 

Karoon Energy (ASX:KAR) – 3.7x ($1.28 vs $0.35)

Karoon has several oil and gas assets in the Americas. These include the Who Dat, Dome Patrol and adjacent acreage in the Gulf of Mexico. It has multiple blocks off the coast of southern Brazil including the Bauna Project. Bauna is operated by Karoon but the US GoM assets are operated by other operators.

The trouble has been the first of these assets. It has seen higher unit production costs and capex than anticipated. Plus, production has been interrupted by multiple hurricanes and anchor chain failures.

 

Fortescue (ASX:FMG) 9.9x ($18.57 vs $1.87)

Fortescue doesn’t have the lowest PE multiple per see, but for a $50bn company, we think it is worth putting it on the list. Fortescue is down from all time highs as iron ore prices corrected from all time highs. It remains to be seen if prices will go anywhere near 2021 levels again, hence investor pessimism. This has not stopped the company being a decent dividend payer, however.

 

Seven West Media – 3.8x ($0.14 vs $0.04)

Seven West is responsible for the Seven Network and the West Australian. Investors aren’t keen on the media industry because it is highly competitive and low-margin. In FY24, its revenue fell 5% and its profit fell by two thirds. In the first few months of FY25, its revenue is down 6.5%, although it is on track to deliver cost reductions of $20-30m.

 

Autosports Group – 7.4x ($1.79 vs $0.24)

Autosports runs dealerships for sports cars. In FY24, it delivered 12% higher revenue and a $61.5m profit. The industry has seen a difficult few years because of a lack of vehicle inventory. ASG has emerged from the turbulent years stronger than ever, making a significant reduction in its debt whilst maintaining dividends. It has bought Stillwell Motor Group in a move that is expected to add 13% to ASG’s annualised revenue.

 

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