Washington H. Soul Pattinson and Company Limited (SOL.AX) stock analysis

In our weekly check, Washington H. Soul Pattinson and Company Limited is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 15 pass, warnings: 2, red flags: 8.

About Washington H. Soul Pattinson and Company Limited

Washington H. Soul Pattinson and Company Limited is a Financial Services company (Financial - Conglomerates) based in Australia, listed on ASX as SOL.AX.

What our checks show for SOL.AX

Red flags

• Operating profit does not cover the interest bill (-1x): interest is paid from cash or new debt.
• The gross margin fell by 28.3 points, to 31.5%: costs are rising faster than prices.
• Operating cash flow is negative while the company reports a profit: the profit does not arrive as cash.
• Analysts expect revenue to shrink about 21.6% a year.
• Analysts expect the net margin to shrink by 58.3 points from today's 147%.
• Free cash flow is negative (-13.4% of revenue): the business spends more cash than it brings in.
• Return on capital (ROCE) is zero or negative: the business does not earn on the money put into it.
• Pay in shares equals 0% of free cash flow: it dilutes shareholders.

Warning signs

• Analysts expect earnings per share to shrink about 33.8% a year.
• The stock has fallen as much as 45% from a peak. Would you have held through that?

Strengths

• Debt is low: 0.07x equity.
• The net margin rose by 147 points over 5 years, to 147%.
• Revenue grew 60.2% a year over the last 3 years.
• Earnings per share grew 39.1% a year over the last 3 years.
• Net profit grew 46.9% a year over the last 3 years.
• The company keeps 147% of its revenue as net profit.

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Questions

What grade does Washington H. Soul Pattinson and Company Limited (SOL.AX) have?

In our weekly check, Washington H. Soul Pattinson and Company Limited is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 15 pass, warnings: 2, red flags: 8. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of SOL.AX stock?

This week's biggest flags for Washington H. Soul Pattinson and Company Limited: Weak interest cover, Gross margin falling, Profits not backed by cash. In total 10 of 25 checks show a warning or a red flag.

What does Washington H. Soul Pattinson and Company Limited do?

Washington H. Soul Pattinson and Company Limited is a Financial Services company (Financial - Conglomerates) based in Australia, listed on ASX as SOL.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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