# The a2 Milk Company (A2M.AU)

Canonical: https://gigainvestors.com/s/A2M.AU

Analysis as of: 2026-10-16T07:38:44.721Z. Financial observations: FY2004–FY2026.

Listing currency: AUD. Reporting currency: NZD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: AUD 6.82 per share; close as of 2026-10-15.

Estimated value: low AUD 3.82 per share, central AUD 5.10 per share, high AUD 5.85 per share. Buy at or below the central value AUD 5.10 per share. Valuation as of 2026-10-16T07:38:44.721Z; scenarios are not confidence intervals.

Expected annual return: 8.1% at the stated quote. About 8.1% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; AU 10-year bond 5.2% + 4 points).

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.46×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.25×

- FY2018: 0.30×

- FY2019: 0.32×

- FY2020: 0.32×

- FY2021: 0.10×

- FY2022: 0.12×

- FY2023: 0.13×

- FY2024: 0.12×

- FY2025: 0.12×

- FY2026: 0.14×

### moat: pass

- ROIC, median of available years: 66.0%

- ROIC, second-lowest year: 36.6%

- Typical minus recent gross margin: 1.0 pp

- Typical gross margin (annual median): 47.1%

- Recent gross margin (lower of latest and 3-year median): 46.1%

- Years with nonpositive capital: 0

- Capital spending / revenue: 0.5%

- ROIC including acquisitions, ten-year median: 46.4%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 81.6%

- FY2018: 94.1%

- FY2019: 87.9%

- FY2020: >100%

- FY2021: 36.1%

- FY2022: 36.6%

- FY2023: 38.2%

- FY2024: 50.3%

- FY2025: 41.6%

- FY2026: >100%

### economics: pass

- Owner earnings / net income, 5-yr: 0.99×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: NZD 854M

- Net income, five-year total: NZD 865M

- Return on incremental invested capital: 54.0%

- Working capital / revenue, annual change: 0.7 pp

- Working capital / revenue, change between three-year averages: 4.5 pp

- Working capital / revenue, final three-year average: 12.3%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.08×

- FY2023: 1.02×

- FY2024: 1.04×

- FY2025: 1.09×

- FY2026: 0.77×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 87.9% vs 50.3%

- Per-share earnings: 0.12 to 0.28 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.0%

- Ordinary dilution, 5-year annual growth: -0.3%

- Market cap gain: NZD 3.3B

- Cumulative retained earnings: NZD 1.2B

- Diluted shares, 10-year annual growth: -0.0%

- Diluted shares, 5-year annual growth: -0.3%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 10.9%

- Per-share value change: NZD 0.16

- Per-share value, starting three-year median: NZD 0.12

- Per-share value, ending three-year median: NZD 0.28

- Buybacks concentrated in cheaper years (correlation): 1.00

- Average buyback yield: 1.3%

- Buyback history: 3 years

- Debt-funded buybacks: No

- Acquisition spending: NZD 215M

- Cumulative net income, 10 years: NZD 1.9B

- ROIC, first three-year median: 87.9%

- ROIC, last three-year median: 50.3%

Chart: Earnings per share; fiscal year observations.

- FY2017: NZD 0.12

- FY2018: NZD 0.26

- FY2019: NZD 0.39

- FY2020: NZD 0.52

- FY2021: NZD 0.11

- FY2022: NZD 0.16

- FY2023: NZD 0.21

- FY2024: NZD 0.23

- FY2025: NZD 0.28

- FY2026: NZD 0.30

### accounting: pass

- latest-year receivables to sales index (DSRI) exceeds 1.465

- Sloan accruals: 4.3%

- Receivables to sales index (DSRI): 1.80×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.61×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.21×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -2.7%

- FY2018: -4.9%

- FY2019: -0.1%

- FY2020: -2.9%

- FY2021: -0.6%

- FY2022: -1.1%

- FY2023: 2.8%

- FY2024: -5.1%

- FY2025: 0.1%

- FY2026: 4.3%

## Holders

## Price story

Down 30% since Feb 2026 · sales +3.8%

Story as of 2026-10-16T10:00:10.208Z; price observation 2026-10-15.

Price needs cash profits to grow 10.8% a year for ten years

### Sales · FY2025–2026

sales +3.8%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2017: NZD 550M 

- FY2018: NZD 923M 

- FY2019: NZD 1.3B 

- FY2020: NZD 1.7B 

- FY2021: NZD 1.2B 

- FY2022: NZD 1.4B 

- FY2023: NZD 1.6B 

- FY2024: NZD 1.7B 

- FY2025: NZD 1.9B 

- FY2026: NZD 2.0B 

### Gross margin · FY2026

gross margin 47.7%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2017: 48.0% 

- FY2018: 50.4% 

- FY2019: 54.8% 

- FY2020: 56.0% 

- FY2021: 42.3% 

- FY2022: 46.0% 

- FY2023: 46.5% 

- FY2024: 45.8% 

- FY2025: 46.1% 

- FY2026: 47.7% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in packaged foods; annual sales are NZD 2 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2026: revenue 1970693470; grossProfit 939644984; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); A2M.AU: The a2 Milk Company Limited, together with its subsidiaries, sells A2-type protein type branded milk and related products in Australia, New Zealand, China, rest of Asia, and the United States. The company offers infant milk formula, milk, and other nutritional products under the a2 Milk and a2 Platinum brands. It also provides rent, royalty, and licensing services. The company was formerly known as A2 Corporation Limited and changed its name to The a2 Milk Company Limited in April 2014. The a2 Milk Company Limited was incorporated in 2000 and is based in Auckland, New Zealand.

### Why customers stay

Margins ranged from 45.8% to 47.7% during 2024–26; it earns 66% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2024: grossProfit / revenue = 45.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2025: grossProfit / revenue = 46.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2026: grossProfit / revenue = 47.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); 10-year return on capital observations [[2017,0.8164826785775373],[2018,0.9413235387023392],[2019,0.8786525489830079],[2020,1.3311835515682828],[2021,0.3614371413197041],[2022,0.3661366934113979],[2023,0.38158180338247266],[2024,0.5029523281172285],[2025,0.41649990489612443],[2026,1.8619710593236756]]; median 0.6597175033473829. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 6.4% of cash earnings on expansion; earns 54% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2017: growth capex 0; upkeep 2471000; owner earnings 90839338. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2018: growth capex 2656708; upkeep 2189292; owner earnings 195684000. Growth capex / owner earnings = 0.013576521330308048.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2019: growth capex 1176530; upkeep 2185470; owner earnings 287741000. Growth capex / owner earnings = 0.004088850737294998.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2020: growth capex 2915737; upkeep 4306263; owner earnings 382468400. Growth capex / owner earnings = 0.0076234716384412414.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2021: growth capex 0; upkeep 7311000; owner earnings 77445741. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2022: growth capex 0; upkeep 5168000; owner earnings 132139306. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2023: growth capex 0; upkeep 10407000; owner earnings 159219725. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2024: growth capex 0; upkeep 20526000; owner earnings 173584000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2025: growth capex 0; upkeep 3971000; owner earnings 221222010. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); FY2026: growth capex 10761105.796076886; upkeep 62658462.20392311; owner earnings 167466122.7960769. Growth capex / owner earnings = 0.06425840412619249.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); Incremental return on capital 0.5402233383499334, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); Dividend observations: [[2017,0],[2018,0],[2019,0],[2020,1775000],[2021,13694000],[2022,54000000],[2023,36000],[2024,0],[2025,61542000],[2026,166717588]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 5.6% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); A2M.AU SharesStats.PercentInsiders = 5.578 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 10.8% yearly over ten years; actual growth was 18.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:38:44.721Z); Ten-year compound average after fade. Initial solved rate 0.14186171453122165. Price 6.82; FX 0.8124078517533463; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 0.0415015273314747 → FY2026 0.22868469566776314. Closing-price date 2026-10-15.

## Monthly share-price history (AUD per share)

- 2016-10: AUD 1.75 per share

- 2016-11: AUD 2.38 per share

- 2016-12: AUD 2.04 per share

- 2017-01: AUD 2.12 per share

- 2017-02: AUD 2.21 per share

- 2017-03: AUD 2.74 per share

- 2017-04: AUD 3.10 per share

- 2017-05: AUD 3.18 per share

- 2017-06: AUD 3.76 per share

- 2017-07: AUD 4.14 per share

- 2017-08: AUD 5.04 per share

- 2017-09: AUD 5.86 per share

- 2017-10: AUD 7.62 per share

- 2017-11: AUD 7.59 per share

- 2017-12: AUD 7.37 per share

- 2018-01: AUD 8.29 per share

- 2018-02: AUD 12.23 per share

- 2018-03: AUD 11.46 per share

- 2018-04: AUD 11.31 per share

- 2018-05: AUD 9.93 per share

- 2018-06: AUD 10.52 per share

- 2018-07: AUD 9.60 per share

- 2018-08: AUD 11.50 per share

- 2018-09: AUD 10.24 per share

- 2018-10: AUD 9.72 per share

- 2018-11: AUD 9.81 per share

- 2018-12: AUD 10.32 per share

- 2019-01: AUD 12.08 per share

- 2019-02: AUD 13.77 per share

- 2019-03: AUD 13.62 per share

- 2019-04: AUD 15.96 per share

- 2019-05: AUD 14.68 per share

- 2019-06: AUD 13.85 per share

- 2019-07: AUD 17.12 per share

- 2019-08: AUD 13.55 per share

- 2019-09: AUD 12.16 per share

- 2019-10: AUD 12.04 per share

- 2019-11: AUD 14.77 per share

- 2019-12: AUD 14.30 per share

- 2020-01: AUD 14.51 per share

- 2020-02: AUD 15.42 per share

- 2020-03: AUD 16.60 per share

- 2020-04: AUD 18.22 per share

- 2020-05: AUD 17.71 per share

- 2020-06: AUD 18.66 per share

- 2020-07: AUD 19.29 per share

- 2020-08: AUD 17.01 per share

- 2020-09: AUD 14.05 per share

- 2020-10: AUD 13.67 per share

- 2020-11: AUD 13.82 per share

- 2020-12: AUD 11.45 per share

- 2021-01: AUD 10.70 per share

- 2021-02: AUD 8.99 per share

- 2021-03: AUD 7.83 per share

- 2021-04: AUD 7.22 per share

- 2021-05: AUD 5.52 per share

- 2021-06: AUD 6.00 per share

- 2021-07: AUD 5.86 per share

- 2021-08: AUD 5.83 per share

- 2021-09: AUD 6.24 per share

- 2021-10: AUD 6.25 per share

- 2021-11: AUD 5.92 per share

- 2021-12: AUD 5.46 per share

- 2022-01: AUD 5.25 per share

- 2022-02: AUD 5.51 per share

- 2022-03: AUD 5.22 per share

- 2022-04: AUD 4.46 per share

- 2022-05: AUD 4.80 per share

- 2022-06: AUD 4.39 per share

- 2022-07: AUD 4.54 per share

- 2022-08: AUD 5.55 per share

- 2022-09: AUD 5.40 per share

- 2022-10: AUD 5.26 per share

- 2022-11: AUD 6.20 per share

- 2022-12: AUD 6.88 per share

- 2023-01: AUD 6.82 per share

- 2023-02: AUD 6.62 per share

- 2023-03: AUD 5.81 per share

- 2023-04: AUD 5.43 per share

- 2023-05: AUD 5.30 per share

- 2023-06: AUD 4.89 per share

- 2023-07: AUD 5.11 per share

- 2023-08: AUD 4.55 per share

- 2023-09: AUD 4.24 per share

- 2023-10: AUD 3.84 per share

- 2023-11: AUD 3.92 per share

- 2023-12: AUD 4.26 per share

- 2024-01: AUD 4.83 per share

- 2024-02: AUD 5.79 per share

- 2024-03: AUD 6.25 per share

- 2024-04: AUD 6.10 per share

- 2024-05: AUD 7.08 per share

- 2024-06: AUD 6.77 per share

- 2024-07: AUD 7.16 per share

- 2024-08: AUD 5.59 per share

- 2024-09: AUD 6.24 per share

- 2024-10: AUD 5.77 per share

- 2024-11: AUD 5.75 per share

- 2024-12: AUD 5.78 per share

- 2025-01: AUD 5.90 per share

- 2025-02: AUD 7.98 per share

- 2025-03: AUD 7.93 per share

- 2025-04: AUD 8.18 per share

- 2025-05: AUD 8.33 per share

- 2025-06: AUD 8.01 per share

- 2025-07: AUD 8.09 per share

- 2025-08: AUD 9.60 per share

- 2025-09: AUD 8.63 per share

- 2025-10: AUD 9.53 per share

- 2025-11: AUD 9.59 per share

- 2025-12: AUD 9.21 per share

- 2026-01: AUD 8.47 per share

- 2026-02: AUD 9.73 per share

- 2026-03: AUD 9.57 per share

- 2026-04: AUD 7.08 per share

- 2026-05: AUD 5.37 per share

- 2026-06: AUD 7.48 per share

- 2026-07: AUD 6.89 per share

- 2026-08: AUD 6.61 per share

- 2026-09: AUD 6.66 per share

- 2026-10: AUD 6.63 per share

## Annual estimated value (AUD per share)

- FY2017: low AUD 0.48 per share, central AUD 0.63 per share, high AUD 0.72 per share

- FY2018: low AUD 1.53 per share, central AUD 2.04 per share, high AUD 2.33 per share

- FY2019: low AUD 3.68 per share, central AUD 5.05 per share, high AUD 5.85 per share

- FY2020: low AUD 6.35 per share, central AUD 8.69 per share, high AUD 10.05 per share

- FY2021: low AUD 4.62 per share, central AUD 6.06 per share, high AUD 6.95 per share

- FY2022: low AUD 5.48 per share, central AUD 7.43 per share, high AUD 8.57 per share

- FY2023: low AUD 2.81 per share, central AUD 3.08 per share, high AUD 3.44 per share

- FY2024: low AUD 3.59 per share, central AUD 4.68 per share, high AUD 5.31 per share

- FY2025: low AUD 4.07 per share, central AUD 5.31 per share, high AUD 6.03 per share

- FY2026: low AUD 3.80 per share, central AUD 5.07 per share, high AUD 5.82 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:44:33.902Z where newer inputs omit a numeric field or fiscal period.

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.