A2 Milk Company Ltd
NZX:ATM

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A2 Milk Company Ltd Logo
A2 Milk Company Ltd
NZX:ATM
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Price: 6.29 NZD 18.01% Market Closed
Market Cap: 4.6B NZD
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Intrinsic Value

The intrinsic value of one ATM stock under the Base Case scenario is 5.99 NZD. Compared to the current market price of 6.29 NZD, A2 Milk Company Ltd is Overvalued by 5%.

The Intrinsic Value is calculated as the average of DCF and Relative values:

ATM Intrinsic Value
5.99 NZD
Overvaluation 5%
Intrinsic Value
Price
Worst Case
Base Case
Best Case

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A2 Milk Company Ltd

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Backtest Conclusion
Very Attractive
Current Valuation
+45%
Avg Valuation
-12%
Worst Valuation
-49%
Best Valuation
+45%

Stock is trading at its lowest valuation over the past 5 years.

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Fundamental Analysis

Economic Moat
A2 Milk Company Ltd

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Financials
Annual
Quarterly
TTM
Annual
Quarterly
TTM

Balance Sheet Decomposition
A2 Milk Company Ltd

Current Assets 1.3B
Cash & Short-Term Investments 968.9m
Receivables 78.1m
Other Current Assets 240.9m
Non-Current Assets 446.9m
Long-Term Investments 44.1m
PP&E 257.4m
Intangibles 111.1m
Other Non-Current Assets 34.4m
Current Liabilities 416.8m
Accounts Payable 347.6m
Other Current Liabilities 69.2m
Non-Current Liabilities 51.6m
Long-Term Debt 60.6m
Other Non-Current Liabilities -9m
Efficiency

Earnings Waterfall
A2 Milk Company Ltd

Revenue
1.7B NZD
Cost of Revenue
-906.7m NZD
Gross Profit
766.6m NZD
Operating Expenses
-564.4m NZD
Operating Income
202.2m NZD
Other Expenses
-34.7m NZD
Net Income
167.6m NZD

Free Cash Flow Analysis
A2 Milk Company Ltd

Last Value
3-Years Average
FCF Margin
Conversion Rate
Earnings Calls

The a2 Milk Company reported strong financial performance aligning with its double-digit revenue and earnings growth expectations. FY23 featured a 10% revenue surge to $1.59 billion, an 11.8% EBITDA increase to $219 million, maintaining a 13.8% margin, and a significant EPS growth of 28.7% to $0.212. The results were buoyed by a strong China segment, with sales surging by 38% and gaining substantial market share in China labeled Infant Milk Formula (IMF). The company observed its highest brand investment at $260 million, boosting China brand health metrics. Concurrent investments in marketing and reregistration of China label IMF by SAMR were notable highlights. For FY24, a cautiously optimistic forecast projects low single-digit revenue growth amidst a challenging China IMF market, with gross and EBITDA margins expected to be broadly similar to FY23.

What is Earnings Call?
Fundamental Scores

ATM Profitability Score
Profitability Due Diligence

A2 Milk Company Ltd's profitability score is 60/100. The higher the profitability score, the more profitable the company is.

Positive Gross Profit
Positive 3-Year Average ROIC
Positive Free Cash Flow
Exceptional ROIC
60/100
Profitability
Score

A2 Milk Company Ltd's profitability score is 60/100. The higher the profitability score, the more profitable the company is.

ATM Solvency Score
Solvency Due Diligence

A2 Milk Company Ltd's solvency score is 84/100. The higher the solvency score, the more solvent the company is.

High Altman Z-Score
Negative Net Debt
Low D/E
Long-Term Solvency
84/100
Solvency
Score

A2 Milk Company Ltd's solvency score is 84/100. The higher the solvency score, the more solvent the company is.

Wall St
Price Targets

ATM Price Targets Summary
A2 Milk Company Ltd

Wall Street analysts forecast ATM stock price to rise over the next 12 months.

According to Wall Street analysts, the average 1-year price target for ATM is 7 NZD with a low forecast of 6.36 NZD and a high forecast of 7.93 NZD.

Lowest
Price Target
6.36 NZD
1% Upside
Average
Price Target
7 NZD
11% Upside
Highest
Price Target
7.93 NZD
26% Upside
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Dividends

A2 Milk Company Ltd
does not pay dividends
Shareholder Yield

Current shareholder yield for ATM is .

Shareholder yield represents the total return a company provides to its shareholders, calculated as the sum of dividend yield, buyback yield, and debt paydown yield. What is shareholder yield?

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Profile

A2 Milk Company Ltd Logo
A2 Milk Company Ltd

Country

New Zealand

Industry

Food Products

Market Cap

4.5B NZD

Dividend Yield

0%

Description

The a2 Milk Co. Ltd. engages in the distribution and sale of milk and dairy products. The firm operates through four segments, which include Australia and New Zealand; China and other Asia; the UK, and the USA. The firm's portfolio composition includes liquid milk, infant formula and other. The Australia and New Zealand segment includes the sale of milk, cream, infant formula, whole milk powder and ice cream. China and other Asia segment includes milk, infant formula, and whole milk powder sales. The China and other Asia segment is also responsible for the infant formula supply chain from New Zealand to all markets. The UK and USA segment includes milk and infant formula sales. The firm's brands include a2 Milk and a2 Platinum.

Contact

AUCKLAND
Level 10, 51 Shortland Street
+6499729802.0
thea2milkcompany.com

IPO

2004-04-21

Employees

184

Officers

MD, CEO & Director
Mr. David L. Bortolussi B.Com., BComm, F.C.A., FFin
Chief Financial Officer
Mr. David Muscat BComm, CA
Group Head of Investor Relations & Sustainability
Mr. David Akers
Chief Legal & Sustainability Officer and Company Secretary
Mr. Jaron McVicar
Chief Marketing Officer
Ms. Edith Bailey
Chief People & Culture Officer
Ms. Amanda Hart
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Chief Executive of Greater China
Mr. Li Xiao
Managing Director of ANZ & Strategy
Ms. Eleanor Khor
Managing Director of USA
Mr. Kevin Bush
Managing Director of International
Mr. Yohan Senaratne
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See Also

Discover More
What is the Intrinsic Value of one ATM stock?

The intrinsic value of one ATM stock under the Base Case scenario is 5.99 NZD.

Is ATM stock undervalued or overvalued?

Compared to the current market price of 6.29 NZD, A2 Milk Company Ltd is Overvalued by 5%.

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