FNArena’s Weekly Insights – 18 August 2025
In today’s Weekly Insights:
Early August Signals & Observations
By Rudi Filapek-Vandyck, Editor
The first two weeks of the August reporting season have only shown a limited sample of how corporate Australia is performing –the bulk starts flooding in from Wednesday this week onwards– but already there are plenty of signals for investors to take on board.
The first impression is plenty of share prices respond positively to results, but those who disappoint will get punished. See AGL Energy ((AGL)), Audinate Group ((AD8)), Bravura Solutions ((BVS)), oOh!media ((OML)), and SGH Ltd ((SGH)).
Those examples are thus far matched by strong gains for the likes of Coronado Global Resources ((CRN)), Baby Bunting ((BBN)), Orora ((ORA)), Temple & Webster ((TPW)), and Westpac ((WBC)).
The first two weeks of August have seen more gains than the occasional shellacking, which has underpinned the market’s positive momentum resulting in a fresh all-time record high at the month’s half-way point of 8,938.60.
But maybe not all is what it necessarily looks like as the first 52 results of the season suggest corporate Australia is not strong and healthy enough to handsomely beat rather mediocre forecasts, at least that would be one of the conclusions from the first two weeks.
On Friday August the 15th, 52 earnings releases had only seen 23% (12 results) outperforming analysts’ forecasts, while 27% (14 results) underwhelmed and the big bulk (50% or 26 results) proved simply in-line with forecasts.
It might still be early days with another 330 results or so to be assessed by early September, but those numbers do not make for a great opening gambit.
For context, I have gone back in time and compared with where we were at this point in the past three seasons.
In February, 47 results had seen 42.5% outperforming forecasts against 25.5% ‘misses’ and 32% in line.
In August last year, 64 results had seen 36% in ‘beats’ versus 31% in disappointments and 33% in line.
In February last year, 68 reports generated 41% in ‘beats’ against 22% in ‘misses’ and 37% in line.
Now consider that August last year ultimately ended with the worst score in the 14 year history of FNArena’s Corporate Results Monitor (by a wide margin), and that the two February seasons were not that great either.
The argument that the local economy needs more RBA rate cutting, and maybe less uncertainty from tariffs and China-Russia-Israel-US tensions, would find solid support from those numbers.
Note also: the number of companies reporting in the first half of each season continues to decline from the year prior. Is this too a signal companies are merely struggling and muddling instead of reaping home runs and tries?
By Monday, the numbers on FNArena’s Corporate Results Monitor have worsened, not improved, with 59 results disappointing by 30.5% (18 results) against 23.7% better-than-forecasts and the remaining 27 (45.8%) simply meeting forecasts.
Early indications are similar for the 17 or so companies reporting on the day; most manage to broadly meet analysts’ estimates, with a bias towards slight ‘misses’. Results released by Audinate Group and oOh!media have been identified for instant capital punishment.
As things stand, August 2025 will mark the third year in succession of net negative earnings growth for the ASX200, currently estimated at -1.6%. The local average EPS will have declined by circa -19% since peaking in 2022.
Expectations are FY26 and FY27 should see net positive outcomes of (currently estimated) 4.5% and 7.5% respectively, though the underlying trend is still to the downside.
July and August are witnessing large investment portfolios rotating into smaller caps, resources, cyclicals and other laggards, suggesting market positioning is changing towards (anticipation of) a better environment in 2026.
Corporate results are never the sole determining factor, not even during reporting season, but large beats and misses can leave major imprints on share prices that last for months after the market update.
Compare The Pair
If I had to summarise the first half of this season, I’d go with Life360 ((360)) versus Qoria ((QOR)). Allow me to explain.
Life360 is a US-headquartered ‘family safety’ network developer that listed on the ASX in late 2018 and whose spectacular growth momentum has really captured investors’ attention since 2023. Its share price has almost appreciated ten-fold over the past 2.5 years.
Qoria, on the other hand, originally started life as Family Zone Cyber Safety in Perth in 2014. The current name was adopted in May 2023. Its existence on the ASX has followed a much less ebulliant trajectory.
Even after a spectacular re-animation in 2025, its share price still has some work to do in order to surpass the two peaks recorded in July of 2017 and July of 2021.
The two businesses have some overlap, but are far from similar. Life360 offers an app in direct competition with Apple and Google and concentrates on families, including kids and pets and just about anything that can be traced and tracked.
Qoria specifically targets kids’ safety and its service in the cloud (SaaS) runs through schools.
Life360 has become profitable, Qoria is not there yet. Life360 is growing much faster and is a much larger entity with quarterly sales larger than the circa $117m in revenues Qoria might announce for its full financial FY25 this month.
All of this easily explains why Life360’s market cap of $10bn is more than ten times the size of Qoria’s (less than $900m).
But here is where this story gets interesting. Because of past successes, Life360 shares are trading on what many would consider are elevated multiples.
Qoria’s share price was broadly lingering, moving sideways until a market update in July which pulled in the buyers and almost literally injected a rocket under the share price.
Qoria shares have rallied in excess of 50% over the past number of weeks.
Before or after that market update, some tipsters had suggested investors should sell out of Life360 and swap it for the much cheaper-priced Qoria.
Investors who followed that advice are probably smiling today. Even if they didn’t reap the full 50%-plus in gains, their timing has proved impeccable. Congratulations, and well done.
But that is only one limited way of looking at this.
Let’s move back to Life360 and ignore for now the fact shareholders missed out on a sizeable gain by sticking to their position.
As said, Life360 shares have almost risen by a factor ten over the past 2.5 years, so there would be a lot of smiling faces among its shareholders too.
And it’s not as if the Life360 share price hadn’t moved pre-august either, with a total gain of 78% since January 1.
I can see the logic as to why the tipsters started looking for an alternative. Following such an enormous run, Life360 surely must run out of puff at some stage?
As it turns out, August 2025 wasn’t going to be this company’s Waterloo. Its Q2/mid-year market update has seen the share price adding some 15% over the following five days.
Analysts covering the company have yet again been forced to upgrade their forecasts, which has pushed up valuations and price targets for the twelve months ahead.
One key difference with Qoria is updated targets are still above the share price post rally.
Whether Qoria’s FY25 update later this month might trigger a similar response is yet to be seen, but given its market update in July already included guidance for FY26, I’d be inclined to think it might not.
Currently, analysts’ revised price targets are below where Qoria shares are trading.
The key question that arises from all of this is: who in this story should have the biggest smile?
Those investors who swapped Life360 for Qoria and made a quick killing or those who staid on board and saw their gains increase further?
The question is relevant because examples such as Qoria’s tend to get a lot of media attention, similar to the 30%-plus gain for Coronado Global Resources shares or the 40%-plus reward for investors holding equity in Baby Bunting.
For companies such as Life360 any attention mostly goes out to its elevated multiples and when exactly mighty competitors such as Apple and Google might decide to kill its chances of survival?
I am by no means predicting that Life360 will never ever stumble or disappoint, and maybe Qoria is now embarking on a similar trajectory, but the past number of years have generated plenty of examples of companies growing strongly and continuing to do exactly that.
The likes of ResMed ((RMD)), REA Group ((REA)), TechOne ((TNE)), Xero ((XRO)) and others have maintained their positive trajectory for a lot longer than the past 2.5 years, but at its core their story is very much the same.
Ahead of every reporting season, one can sense the doubt and the criticism surrounding their share price, with tipsters suggesting maybe Bravura could be a better choice, or Nuix ((NXL)), or EML Payments ((EML)), but have a wild guess which share prices are today at or near an all-time record high?
So, instead of highlighting the random successes that can generate outsized returns from beaten-down market laggards on surprisingly better-than-feared market updates, let’s shine a light on, and admire, the remarkable resilience from the ASX’s highest quality growth businesses that yet again stand out from the crowd in this early phase of the current results season.
Expectations are well above average for these companies, and yet they very rarely mimic an Audinate Group or Avita Medical ((AVH)).
If anything, in most reporting periods these companies shine through quality and excellence, usually forcing analysts to add-on to future growth projections.
Quality Among The Winners
The opening two weeks of August have already provided plenty of positive examples of multi-year strong performers that refuse to run out of oxygen.
Viewed from such angle, August 2025 is shaping up as a repeat of February this year, which repeated the experience of August last year, which roughly followed the script of February that year.
I think you get the picture. Financial results released by Nick Scali ((NCK)), Pinnacle Investment Management ((PNI)) and REA Group strictly taken did not beat expectations beforehand, but performances were solid enough to continue supporting their share prices.
Quality growers that did prove the sceptics wrong include Car Group ((CAR)), JB Hi-Fi ((JBH)), Pro Medicus ((PME)), ResMed, and Temple & Webster.
Cochlear’s ((COH)) result did not excite the market, but there’s clearly sufficient confidence that launches of Nexa system and Kanso 3 will re-initiate strong growth in 2H26 and beyond.
As we have passed the midpoint of the month, corporate results releases are only gradually ramping up in numbers, as has become the local tradition for many years now.
By early September, FNArena’s Corporate Results Monitor will cover circa 385 companies, so there’s a whole lot to be unleashed upon us, still.
Early signals are not looking very flash. I expect most quality growth companies to continue the positive balance to date.
Elsewhere, we will see more positive repeats of Baby Bunting and Coronado, but I equally expect to see a whole lot more disappointments a la Audinate Group and Bravura Solutions.
As per always, the share market offers a true smorgasbord for all varieties in strategies and risk appetite, but maybe there is also an important lesson for investors to be reminded of?
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FNArena’s daily updated Corporate Results Monitor: https://fnarena.com/index.php/reporting_season/
Readers familiar with my research into All-Weather Performers will have noticed the overlap with many of the companies mentioned:
https://fnarena.com/index.php/analysis-data/all-weather-stocks/
Next Week
I may not be able to write Weekly Insights next week as results will be piling upon us by that time.
If not, rest assured I will catch up by the end of the month with stats, observations, insights and everything at my disposal.
But first: let’s get through the deluge that is waiting for us on the horizon.
In preparation of August:
https://fnarena.com/index.php/2025/08/13/rudi-interviewed-is-august-too-early/
https://fnarena.com/index.php/2025/08/06/rudis-view-five-bellwethers-for-august/
https://fnarena.com/index.php/2025/07/30/rudis-view-taking-stock-ahead-of-august/
https://fnarena.com/index.php/2025/07/24/rudis-view-bega-cheese-cettire-harvey-norman-sigma-siteminder-more/
https://fnarena.com/index.php/2025/07/23/rudis-view-extreme-bifurcation-ahead-of-august/
https://fnarena.com/index.php/2025/07/17/rudis-view-aussie-broadband-oohmedia-paladin-energy-seek-xero-more/
https://fnarena.com/index.php/2025/07/16/rudis-view-navigating-covid-legacies/
Review All-Weather Model Portfolio
The financial year ending on June 30th 2025 featured the return of Donald Trump in the White House and of extreme market volatility.
The second half of the year also saw doubt creeping into general sentiment towards AI and demand for data centres.
All in all, a gain of 13.85% (pre-fees) for the twelve months is not something to be unhappy about, right?
FY25 review of the All-Weather Model Portfolio: https://www.fnarena.com/index.php/download-article/?n=4B38C0EF-A173-8CE6-736A7AFC7B19FC49
Model Portfolios, Best Buys & Conviction Calls
This section appears from now on every Thursday morning in a separate update on the website. See Rudi’s Views for the archive going back to 2006 (not a typo).
FNArena Subscription
A subscription to FNArena (6 or 12 months) comes with an archive of Special Reports (21 since 2006); examples below.
(This story was written on Monday, 18th August 2025. It was published on the day in the form of an email to paying subscribers, and again on Wednesday as a story on the website).
(Do note that, in line with all my analyses, appearances and presentations, all of the above names and calculations are provided for educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views are mine and not by association FNArena’s see disclaimer on the website.
In addition, since FNArena runs a Model Portfolio based upon my research on All-Weather Performers it is more than likely that stocks mentioned are included in this Model Portfolio. For all questions about this: contact us via the direct messaging system on the website).
