Woolworths Group Limited (WOW.AX) stock analysis

In our weekly check, Woolworths Group Limited is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 11 pass, warnings: 8, red flags: 6.

About Woolworths Group Limited

Woolworths Group Limited is a Consumer Defensive company (Grocery Stores) based in Australia, listed on ASX as WOW.AX.

What our checks show for WOW.AX

Red flags

• Net debt is 2.6x a year of EBITDA (debt/equity 3.44). That limits room in a downturn and raises refinancing risk.
• The net margin fell by 1 points over 5 years, to 1.6%: the company keeps less of each sale as profit.
• The gross margin fell by 5.9 points, to 23.8%: costs are rising faster than prices.
• The net margin is only 1.6%: little room if costs rise.
• The dividend takes 137% of profit: little cushion if profit falls.
• Recovering from its deepest fall took about 3.3 years.

Warning signs

• Operating profit covers interest only 2.3 times: a weak year could make the payments hard.
• Analysts expect only about 4.4% a year of growth in revenue.
• Revenue grew only 3.6% a year over the last 3 years.
• Earnings per share fell 11.2% a year over the last 3 years.
• Net profit fell 11.1% a year over the last 3 years.
• Free cash flow is only 3.5% of revenue.
• The price is 44.4 times earnings (P/E): the market already pays for a lot of future growth.
• The stock has fallen as much as 47% from a peak. Would you have held through that?

Strengths

• Operating cash flow is 4.35x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 24.1% a year over the next years.
• A large company: market value $35.8 billion.
• Beta 0.26: the stock usually moves less than the market.
• Actively traded: about 2.3 million shares a day.
• Pay in shares is only 0% of free cash flow.

Similar companies

WN.TO · KR · DNP.WA · TSCO.L · COL.AX · L.TO

Questions

What grade does Woolworths Group Limited (WOW.AX) have?

In our weekly check, Woolworths Group Limited is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 11 pass, warnings: 8, red flags: 6. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of WOW.AX stock?

This week's biggest flags for Woolworths Group Limited: High debt, Margins falling, Gross margin falling. In total 14 of 25 checks show a warning or a red flag.

What does Woolworths Group Limited do?

Woolworths Group Limited is a Consumer Defensive company (Grocery Stores) based in Australia, listed on ASX as WOW.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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