Santos Limited (STO.AX) stock analysis

In our weekly check, Santos Limited is graded B (A to F). Of 25 checks on debt, profit, cash flow and trend: 17 pass, warnings: 4, red flags: 4.

About Santos Limited

Santos Limited is an Energy company (Oil & Gas Exploration & Production) based in Australia, listed on ASX as STO.AX.

What our checks show for STO.AX

Red flags

• The gross margin fell by 3 points, to 30.8%: costs are rising faster than prices.
• Revenue fell 12.3% a year over the last 3 years.
• The stock has fallen as much as 86% from a peak. Would you have held through that?
• Return on capital (ROCE) is only 3.7%.

Warning signs

• Earnings per share fell 25.5% a year over the last 3 years.
• Net profit fell 26.3% a year over the last 3 years.
• The dividend takes 94% of profit: little cushion if profit falls.
• The stock is still below its previous peak.

Strengths

• The net margin rose by 2.1 points over 5 years, to 16.1%.
• Operating cash flow is 3.12x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 23.3% a year over the next years.
• Free cash flow is 12.2% of revenue: cash for dividends, buybacks or growth.
• A large company: market value $20.63 billion.
• Beta -0.09: the stock usually moves less than the market.

Similar companies

TOU.TO · WCP.TO · EQT · TPL · EXE · PR

Questions

What grade does Santos Limited (STO.AX) have?

In our weekly check, Santos Limited is graded B (A to F). Of 25 checks on debt, profit, cash flow and trend: 17 pass, warnings: 4, red flags: 4. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of STO.AX stock?

This week's biggest flags for Santos Limited: Gross margin falling, Weak revenue growth, Deep past fall. In total 8 of 25 checks show a warning or a red flag.

What does Santos Limited do?

Santos Limited is an Energy company (Oil & Gas Exploration & Production) based in Australia, listed on ASX as STO.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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