APA Group (APA.AX) stock analysis

In our weekly check, APA Group is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 13 pass, warnings: 9, red flags: 3.

About APA Group

APA Group is an Utilities company (Regulated Gas) based in Australia, listed on ASX as APA.AX.

What our checks show for APA.AX

Red flags

• Net debt is 5.8x a year of EBITDA (debt/equity 5.24). That limits room in a downturn and raises refinancing risk.
• Operating profit covers interest only 1.1 times: a weak year could make the payments hard.
• The dividend takes 275% of profit: little cushion if profit falls.

Warning signs

• The net margin fell by 0.7 points over 5 years, to 7.8%: the company keeps less of each sale as profit.
• Analysts expect only about 4.3% a year of growth in revenue.
• Revenue grew only 1.8% a year over the last 3 years.
• Earnings per share fell 10.1% a year over the last 3 years.
• Net profit fell 3.8% a year over the last 3 years.
• The net margin is only 7.8%: little room if costs rise.
• The stock has fallen as much as 46% from a peak. Would you have held through that?
• The stock is still below its previous peak.
• Return on capital (ROCE) is only 6.2%.

Strengths

• The gross margin is 37.9% and has risen by 4.1 points: pricing power is holding.
• Operating cash flow is 5.35x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 25.1% a year over the next years.
• Analysts expect the net margin to improve by 5.5 points from today's 7.8%.
• Free cash flow is 14.3% of revenue: cash for dividends, buybacks or growth.
• A large company: market value $10.8 billion.

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Questions

What grade does APA Group (APA.AX) have?

In our weekly check, APA Group is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 13 pass, warnings: 9, red flags: 3. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of APA.AX stock?

This week's biggest flags for APA Group: High debt, Weak interest cover, Dividend stretched. In total 12 of 25 checks show a warning or a red flag.

What does APA Group do?

APA Group is an Utilities company (Regulated Gas) based in Australia, listed on ASX as APA.AX.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-24

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