Key Takeaways:
- Wholesale Expansion Catalyst: Aussie Broadband secured a 6 year wholesale agreement with More Telecom covering about 290,000 connections which positions Aussie Broadband for an estimated $12 million EBITDA uplift starting FY27 and lifting total connections above 1 million.
- Leadership and Execution Reset: Aussie Broadband appointed Darren Rowland as CFO effective February 2026 following the November 2025 resignation of Andy Knopp.
- Valuation Time Horizon: Based on a guided valuation model assuming 10% revenue growth and 7% operating margins, Aussie Broadband stock could reach $6 by June 2028 as earnings scale against a 20x P/E multiple.
- Return Profile Math: From a current price of $4, Aussie Broadband implies 42% total upside to $6, translating into roughly 16% annualized returns over a 2 year holding period.
Aussie Broadband Limited (ABB) provides broadband, mobile, voice, and wholesale telecom services across Australia, generating $1 billion in FY25 revenue by serving residential customers alongside business, enterprise, government, and wholesale clients.
The business matters in the Australian telecom market because it combines direct NBN resale with owned fiber, voice infrastructure, and wholesale platforms that supported 788,000 broadband connections and 216,000 mobile services during FY25.
Financially, FY25 revenue reached $1 billion with $230 million in gross profit, $170 million in operating expenses, and $60 million in operating income, translating into operating margins of 5% following several years of margin expansion.
Gross margins stabilized near 20% in FY25 as prior fiber investments reduced backhaul costs, while EBITDA reached $138 million and reflected a structurally more efficient cost base after $11 million in productivity gains.
Strategically, Aussie Broadband reorganized the business into three customer-led segments in July 2025 and unveiled its Look to 28 plan targeting more than $1.6 billion in revenue and at least 11% NBN share by FY28.
Wholesale growth accelerated in August 2025 after a 6 year agreement with More Telecom, supported by the Nitrogen platform, with management stating the deal adds about $12 million in annualized EBITDA from FY27.
As CEO Brian Maher stated, “FY25 was a strong year for Aussie with solid financial results and growth in our core business,” underscoring a strategy focused on disciplined execution, customer scale, and capital flexibility.
With shares near $4 and a modeled FY28 value near $6 despite operating income already at $60 million, the market continues to debate whether margin durability or regulatory and wholesale risks deserve greater weight.
What the Model Says for ABB Stock
Aussie Broadband’s expanding wholesale scale, improving cost structure, and moderate capital intensity support elevated expectations relative to mature telecom peers.
The model assumes 10.1% revenue growth, 6.7% operating margins, and a 19.9x exit multiple, generating a $6.21 target price.
This implies 42.5% total upside and a 15.9% annualized return, exceeding typical opportunity costs for public equity capital.
The valuation model suggests a Buy, since the projected 15.9% annualized return sufficiently offsets operating and regulatory risk at today’s price.
Based on a projected 15.9% annualized return exceeding a standard 10% equity hurdle, the outcome favors capital appreciation, reflecting adequate risk-adjusted compensation and supporting a Buy under disciplined capital allocation principles.
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for Aussie Broadband stock:
1. Revenue Growth: 3%
Revenue expanded from $350 million in FY21 to $1.19 billion in FY25, reflecting rapid share gains that naturally slow as scale increases.
Current revenue of $1.19 billion and FY26 estimates of $1.30 billion show growth persistence supported by wholesale volume additions and higher speed plan uptake.
Sustaining 10.1% growth requires stable residential churn and timely wholesale migrations, while slower NBN activity or pricing pressure would compress growth quickly.
This is above the FY26 growth outlook of 9.8% but below the 1-year historical growth of 18.7%, indicating the model assumes maturation without a re-acceleration buffer.
2. Operating Margins: 7.6%
Operating margins improved from 3% in FY21 to 5% in FY25 as scale benefits and network ownership offset fixed cost intensity.
FY25 operating income of $60 million on $1.19 billion revenue and FY26 margin estimates near 6% support a path toward modest efficiency gains.
Reaching 7.6% margins depends on disciplined cost control and smooth wholesale execution, with downside emerging quickly if integration costs or regulation rise.
This is in line with the FY26 margin expectation of 7.6% and above the 1-year historical margin of 5.4%, indicating the model assumes stability rather than aggressive expansion.
3. Exit P/E Multiple: 7x
The exit multiple capitalizes terminal earnings in a mature telecom profile where growth normalizes and cash generation matters more than expansion narratives.
A 19.9x P/E reflects earnings durability after margin gains are embedded, avoiding double-counting scale benefits already captured in the forecast period.
This multiple assumes consistent execution through FY28, as any earnings miss would compress valuation rather than allow multiple expansion.
This is below the 1-year historical P/E of 23.5x, indicating the model assumes valuation compression consistent with a more mature, lower-growth earnings base.
What Happens If Things Go Better or Worse?
Aussie Broadband stock outcomes depend on subscriber momentum, wholesale execution, and cost discipline, creating divergent paths through 2030.
- Low Case: If competitive pricing pressure and integration friction persist, revenue grows around 5.7% and net margins stay near 6.0% → 9.1% annualized return.
- Mid Case: With residential stability and wholesale onboarding progressing as planned, revenue growth near 6.4% and margins improving toward 6.4% → 14.6% annualized return.
- High Case: If wholesale scale ramps smoothly and cost leverage materializes, revenue reaches about 7.0% and margins approach 6.8% → 19.4% annualized return.
How Much Upside Does Aussie Broadband Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
