Service Stream stock closed at A$2.61 after the market had a full day to digest yesterday’s FY26 result. The share price has already climbed 4.4% over the past week and 13.9% over three months, yet the real story sits in the earnings quality behind that move.
The headline this time is margin and profit strength. Earnings before interest, tax, depreciation and amortisation reached A$163.4m with a 6.6% margin and adjusted net profit after tax came in at A$81.1m. That is what now frames the long term debate on a stock trading on a 28.1x trailing P/E.
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FY26 Earnings Summary
- Revenue FY26 trailing twelve months: A$2,353.7m vs. FY25 trailing twelve months A$2,328.5m (approximately flat with a small uplift)
- Net Income FY26 trailing twelve months: A$56.9m vs. FY25 trailing twelve months A$59.2m (slight decline)
- Basic EPS FY26 trailing twelve months: A$0.08481 vs. FY25 trailing twelve months A$0.09662 (decline)
- Net Profit Margin FY26 trailing twelve months: 2.4% vs. prior year 2.5% (marginally lower profitability per dollar of revenue)
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Service Stream results support a steady bullish tilt
For investors leaning toward the defensive infrastructure story, Service Stream’s latest year lines up reasonably well. Group revenue was slightly higher while EBITDA grew faster, which lifted the margin to 6.6%. Adjusted NPAT and EPS both improved and cash conversion sat above 100%, which helped move the balance sheet into a net cash position of about A$81m. Utilities delivered higher revenue and a stronger margin, and the Defence contract turned a small profit earlier than flagged. That combination supports the idea of recurring style work with improving execution.
Recent earnings leave room for a measured bear view
The risk focused narrative still has some support. Telecommunications revenue declined and segment EBITDA fell about A$12.8m, which highlights exposure to a smaller and more cyclical telco market. Group net profit margin on a trailing basis remained low at 2.4%, only slightly below 2.5% a year earlier. That shows the business is still sensitive to contract mix and pricing. Management also pointed to slower incremental margin gains from here in Utilities. So while the balance sheet looks solid, some contract and margin risks remain part of the story.
Analyze whether Service Stream’s thin 2.4% net margin and premium 28.1x P/E are actually supported by a resilient balance sheet. Verify the debt, cash and runway details in the financial health analysis of Service Stream stock.Stay Ahead Of Your Next Move
If Service Stream’s mix of thin margins, a premium P/E and net cash position has caught your attention, register for free with Simply Wall St and add it to a Watchlist to track price against fair value and watch for your preferred entry point. Once you own Service Stream or any other stock, keep a clear view of what matters using the Portfolio Command Center that highlights key changes without the usual noise. For longer term conviction, tap into crowd sentiment and different angles on the same stock through our Community. That way you can spot emerging catalysts and risks early and give yourself a better chance of staying ahead of the market.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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