Commonwealth Bank of Australia (CBA.AX) stock analysis

In our weekly check, Commonwealth Bank of Australia is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 12 pass, warnings: 3, red flags: 10.

About Commonwealth Bank of Australia

Commonwealth Bank of Australia is a Financial Services company (Banks - Diversified) based in Australia, listed on ASX as CBA.AX.

What our checks show for CBA.AX

Red flags

• Operating cash flow is negative while the company reports a profit: the profit does not arrive as cash.
• Revenue fell 15.4% a year over the last 3 years.
• Free cash flow is negative (-3.3% of revenue): the business spends more cash than it brings in.
• The dividend takes 108% of profit: little cushion if profit falls.
• The stock has fallen as much as 61% from a peak. Would you have held through that?
• Recovering from its deepest fall took about 3.8 years.
• Return on capital (ROCE) is only 1.2%.
• Pay in shares equals 0% of free cash flow: it dilutes shareholders.

Warning signs

• The net margin fell by 1 points over 5 years, to 37%: the company keeps less of each sale as profit.
• Analysts expect only about 4.4% a year of growth in revenue.
• Analysts expect the net margin to shrink by 0.5 points from today's 37%.

Strengths

• The gross margin is 100% and has risen by 17.6 points: pricing power is holding.
• The company keeps 37% of its revenue as net profit.
• A large company: market value $193 billion.
• Actively traded: about 2.1 million shares a day.

Similar companies

RY · SHB-A.ST · WFC · HSBC · MUFG · BAC

Questions

What grade does Commonwealth Bank of Australia (CBA.AX) have?

In our weekly check, Commonwealth Bank of Australia is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 12 pass, warnings: 3, red flags: 10. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of CBA.AX stock?

This week's biggest flags for Commonwealth Bank of Australia: Profits not backed by cash, Weak revenue growth, Weak free cash flow. In total 13 of 25 checks show a warning or a red flag.

What does Commonwealth Bank of Australia do?

Commonwealth Bank of Australia is a Financial Services company (Banks - Diversified) based in Australia, listed on ASX as CBA.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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