Pexa (ASX:PXA): Trying to expand into the Old Dart

Pеxa (ASX:PXA) is one of the few stocks with a literal monopoly over its market e-Conveyancing; but even fewer companies with a monopoly risk losing it with the flick of a pen.

There has been talk of this ever since its 2021 IPO, and whilst threats have not been followed through, they remain. At the same time, Pexa is looking to expand into the UK and is having success in the market.

Will Pexa be able maintain a dominant market position if it loses its monopoly, and can it break into the UK market? Moreover, even if it does keep a monopoly, can it really grow any more than the market?

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Who is Pexa?

Pexa is named after its platform for electronic conveyancing. Conveyancing is the process of transferring properties and their legal title, something that occurs when properties are transferred between different owners or when owners refinance their properties with different lenders.

Pexa began in 2010 after the Council of Australian Governments (COAG) agreed to digitise and automate conveyancing. Conveyancing fees are paid as part of a property’s settlement and substantially vary depending on the nature of the transaction, but are typically between $200 and $2,000. 

From nothing to something

Pexa has undergone rapid growth ever since its establishment, especially in the past five years. Back in 2017, only 20% of all refinancing transactions were completed on Pexa. But now, it processes 99% of all refinancing transactions and 80% of property transfers in Australia.

Pexa debuted on the ASX in early July 2021 having raised $1.2bn at $17.13 per share. Financial administrator Link (ASX: LNK) owned a stake of 42% and CBA held another 24%. Previously, Macquarie, the WA state government, billionaire Paul Little and the other Big Four banks held major stakes, but they all cashed out prior to the IPO. 

Pexa has been an active acquirer since its listing. In August 2022, it bought informed decisions, which provides economic tools and consulting services for decision making.

In May 2023, it launched Value Australia which is an AI-powered property valuation tool. And it bought Land Insight, a leading environmental risk data analytics technology. For its UK ambitions, it bought Smoove, Smoovе is essentially the UK equivalent of Pexa, a company that usеs cloud-based solutions to makе thе conveyancing process more efficient

A volatile property market means a volatile share price

Since reaching an all-time high of $20.81 over the summer of 21-22, Pexa has never reached its all time highs again and is 10% underwater even though its shares briefly rallied in July 2025 (more on this shortly).

Remember that when Pexa listed, the property market was running hot thanks to record low interest rates. The heat of the market showed in Pexa’s FY21 results, with $221m in revenue (up 42% from FY20) and $101.8m in pro forma group EBITDA (up 124%). However, it made a statutory net loss after tax of $11.8m.

The company had another good set of results in FY22, but had stagnant revenues and its bottom line shrank – its EBITDA fell 26% and its NPAT swung from $21.9m in the black to $21.8m in the red due to higher investments as well as higher depreciation and taxes.

After more of the same in FY23, FY24 saw revenues return to growth, finishing 21% higher. Its operating profit was $21.1m, although it made another statutory loss. Ultimately, the company met or exceeded all guidance it provided. For FY25, it provided guidance of 13-19% revenue growth, a> 34% EBITDA margin, but operating cash outflows of $55-58m. In the UK, it indicated a Remo market share of 25-40% and an S&P market share of 25%. More on the UK in a moment.

Not the best bottom line

When we last wrote about Pexa, in February 2025, the company fell as it revised its guidance, informing shareholders it expected a higher impairment than expected of $15m, so upped its impairment guidance from $15-20m to $35-40m. The company also said it would derecognise $19m in tax loses and so expected a tax expense of $40-45m, up from $13-18m.

In FY25, the company ultimately delivered 16% higher revenues ($393.6m), a 1.3% higher EBITDA margin, although its underlying profit fell 6% from $43.8m to $41.1m while its statutory loss blew out from $18m to $76m.

For FY26, it guided to $405-430m revenue, a 32-35% EBITDA margin and a $5-15m ‘Core NPAT’. It would spend ~$60m on its international ambitions. This guidance was reaffirmed earlier this week in a Q1 update.

Losing its Australian monopoly?

One of Pexa’s advantages has been its monopoly position – and being present in every state and territory but the Top End (the NT). There has long been talk of opening the market to competition – obviously this would be bad for Pexa. There is only one formal ‘Electronic Lodgement Network Operator’, Sympli, but it is a minnow compared to Pexa and it has all but given up competing with it (at least on its own).

The ACCC has been investigating complaints of anti-competitive behaviour – specifically during period the company has been supposed to be making its systems interoperable with competitors. The intended deadline for this to happen is December 2025, but this may not be reached especially with no other competitors now.

Old Dart expansion: Good signs, but it costs the bottom line

Shareholders were also excited about Pexa’s plans to expand into the UK. In August 2021, the company secured an agreement with the Bank of England to test the product and had commercial banks on board.

The company has asserted there are no competitors providing the same offering in the Old Dart. And to achieve the same revenue and profit, Pexa would only need a third of the market given the UK market is thrice as large.

As mentioned above, it bought Smoove to help it expand, plus Optima Legal – a remortgage processing firm from Leeds. Progress has been slower than expected as the local market’s understanding is limited. The Australian roll-out was easy because it was enforced by the government.

There may also be resistance amongst conveyancers who earn deposit interest right now and would lose it. Absent orders to use Pexa, there is little incentive to use it. It may be another couple of years before we see meaningful figures from the UK.

Nonetheless, a good sign came back in July 2025 when National Westminister Bank (NatWest) formally agreed to implement the system into its mortgage processing platform. This is the first Tier 1 Lender to commit to implement. Approval from the FCA to be an Authorised Payment Institution came back in April, an essential step to launch the product (specifically its source account capability).

Conclusion

Analysts covering the company have a $17.57 target price on the company. This is >10% above the current price, but roughly in parity with the 2021 target price.

They’re expecting $420.8m revenue in FY26, then $467.5m in FY27, $540.9m in FY28 and $632.5m in FY29. As for the bottom line, analysts expect a $10.7m profit in FY26, then $35m in FY27, $78.1m in FY28, then $133.2m in FY29.

It is at a P/E of 54x for FY26 and 37.1x for FY27. The EV/EBITDA multiples are 21.7x and 18.3x for the next 2 years.

Obviously, analysts expect Pexa will be able to maintain an effective monopoly position in Australia, that it will gain a foothold in the UK market…or both. If you choose to invest in this company, you’re making a bet on that too.

We think it can make a dent in the UK, but don’t expect to see it get to a monopoly position, let alone for market penetration to be anywhere near as easy as it was in Australia.