# Downer Edi (DOW.AU)

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

Analysis as of: 2026-10-16T07:39:08.333Z. Financial observations: FY1997–FY2026.

Listing currency: AUD. Reporting currency: AUD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: AUD 6.88 per share; close as of 2026-10-15.

Estimated value: low AUD 3.34 per share, central AUD 3.68 per share, high AUD 4.13 per share. Buy at or below the central value AUD 3.68 per share. Valuation as of 2026-10-16T07:39:08.333Z; scenarios are not confidence intervals.

Expected annual return: 6.2% at the stated quote. About 6.2% 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

- 6 revenue declines in the last 10 years

- more than 5 revenue declines in ten years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 6

- Years with a net loss: 2

- Operating margin variation: 0.39×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.03×

- FY2018: 0.02×

- FY2019: 0.03×

- FY2020: 0.02×

- FY2021: 0.02×

- FY2022: 0.01×

- FY2023: 0.01×

- FY2024: 0.01×

- FY2025: 0.03×

- FY2026: 0.04×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 10.9%

- ROIC, second-lowest year: 7.3%

- Typical minus recent gross margin: -1.9 pp

- Typical gross margin (annual median): 11.9%

- Recent gross margin (lower of latest and 3-year median): 13.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.5%

- ROIC including acquisitions, ten-year median: 5.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 11.4%

- FY2018: 8.2%

- FY2019: 21.0%

- FY2020: 7.5%

- FY2021: 10.6%

- FY2022: 5.6%

- FY2023: 7.3%

- FY2024: 11.1%

- FY2025: 19.6%

- FY2026: 34.7%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 2.23×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: AUD 419M

- Net income, five-year total: AUD 188M

- Return on incremental invested capital: 0.0%

- Working capital / revenue, annual change: -1.1 pp

- Working capital / revenue, change between three-year averages: -6.7 pp

- Working capital / revenue, final three-year average: -0.1%

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

- FY2022: 0.69×

- FY2023: 1.09×

- FY2024: 2.41×

- FY2025: 1.95×

- FY2026: 1.39×

### management: fail

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

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 11.4% vs 19.6%

- Per-share earnings: 0.31 to 0.20 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 3.0%

- Ordinary dilution, 5-year annual growth: -1.7%

- Market cap gain: AUD 1.6B

- Cumulative retained earnings: AUD -1.1B

- Diluted shares, 10-year annual growth: 3.0%

- Diluted shares, 5-year annual growth: -1.7%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: -5.0%

- Per-share value change: AUD -0.10

- Per-share value, starting three-year median: AUD 0.31

- Per-share value, ending three-year median: AUD 0.20

- Buybacks concentrated in cheaper years (correlation): 0.64

- Average buyback yield: 3.5%

- Buyback history: 7 years

- Debt-funded buybacks: Yes

- Acquisition spending: AUD 4.2B

- Cumulative net income, 10 years: AUD 726M

- ROIC, first three-year median: 11.4%

- ROIC, last three-year median: 19.6%

Chart: Earnings per share; fiscal year observations.

- FY2017: AUD 0.31

- FY2018: AUD 0.11

- FY2019: AUD 0.43

- FY2020: AUD -0.21

- FY2021: AUD 0.25

- FY2022: AUD 0.21

- FY2023: AUD -0.54

- FY2024: AUD 0.10

- FY2025: AUD 0.20

- FY2026: AUD 0.33

### accounting: pass

- Sloan accruals: -4.3%

- Receivables to sales index (DSRI): 1.25×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.32×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.02×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -3.4%

- FY2018: -6.6%

- FY2019: -4.7%

- FY2020: -3.5%

- FY2021: -6.3%

- FY2022: -4.5%

- FY2023: -9.4%

- FY2024: -6.7%

- FY2025: -6.6%

- FY2026: -4.3%

## Holders

## Price story

Price needs cash profits to grow 10.5% a year for ten years · sales -7.5%

Story as of 2026-10-16T10:00:10.505Z; price observation 2026-10-15.

Price needs cash profits to grow 10.5% a year for ten years

### Sales · FY2025–2026

sales -7.5%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2017: AUD 7.3B 

- FY2018: AUD 12B 

- FY2019: AUD 13B 

- FY2020: AUD 13B 

- FY2021: AUD 12B 

- FY2022: AUD 11B 

- FY2023: AUD 12B 

- FY2024: AUD 11B 

- FY2025: AUD 10B 

- FY2026: AUD 9.7B 

### Gross margin · FY2026

gross margin 13.8%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2017: 12.1% 

- FY2018: 81.3% 

- FY2019: 11.3% 

- FY2020: 11.3% 

- FY2021: 12.5% 

- FY2022: 11.1% 

- FY2023: 11.0% 

- FY2024: 11.7% 

- FY2025: 86.3% 

- FY2026: 13.8% 

## Owner memo

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

### How it makes money

Operates in engineering & construction; annual sales are AUD 9.7 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); FY2026: revenue 9699900000; grossProfit 1339700000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DOW.AU: Downer EDI Limited operates as an integrated facilities management services provider in Australia, New Zealand, and internationally. It operates through Transport; Energy & Utilities; and Facilities segments. The Transport segment offers road network management; routine road maintenance; asset management systems; spray sealing; asphalt laying; landfill diversion solutions; rollingstock to infrastructure services; and building and construction solutions, such as signalling, track and station works, bridges, airports, and roads. This segment also manufacturing and supply of bitumen-based and asphalt products; and designs and manufactures life-support services comprising fleet maintenance, operations, and comprehensive overhaul of assets. The Energy & Utilities segment operates power, gas, water, telecommunications, industrial, resources, and energy businesses, which includes planning, designing, constructing, operating, maintaining, managing, and decommissioning of power, gas network assets, and mineral process equipment; and designs and manufactures mineral process equipment. This segment also offers water lifecycle solutions for municipal and industrial water users, including water and wastewater treatment; network construction and rehabilitation services; end-to-end technology and communications solutions; maintenance shutdowns; turnaround and outrage delivery. The Facilities segment provides outsourced facilities comprising lifecycle of strategic assets ranging from maintenance and operational support to expansion and frontline service delivery; asset management; and consulting services to education, health, government, and defence. Downer EDI Limited was incorporated in 1989 and is headquartered in Sydney, Australia.

### Why customers stay

Margins ranged from 11.7% to 86.3% during 2024–26; it earns 10.9% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); FY2024: grossProfit / revenue = 11.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); FY2025: grossProfit / revenue = 86.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); FY2026: grossProfit / revenue = 13.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); 10-year return on capital observations [[2017,0.11380255244441206],[2018,0.08181395637084779],[2019,0.2097092018577423],[2020,0.07525694009601336],[2021,0.10641040599240352],[2022,0.056293169608595546],[2023,0.07255602596669489],[2024,0.11093078430345045],[2025,0.1962194182498067],[2026,0.34689406901895664]]; median 0.10867059514792698. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 11% gross margin through 2022 cost inflation.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); Gross margin observations: [[2021,0.12546904315197],[2022,0.11085943921819344],[2023,0.11029177946800739]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back AUD 96.5 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); FY2017: growth capex 0; upkeep 203600000; owner earnings 198100000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); FY2018: growth capex 11800000; upkeep 345000000; owner earnings 71400000. Growth capex / owner earnings = 0.16526610644257703.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); FY2019: growth capex 38800000; upkeep 360000000; owner earnings 251460000. Growth capex / owner earnings = 0.15429889445637476.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); FY2021: growth capex 0; upkeep 285300000; owner earnings 258140000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); FY2022: growth capex 0; upkeep 279800000; owner earnings 105220000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); FY2024: growth capex 0; upkeep 146300000; owner earnings 166420000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); FY2025: growth capex 0; upkeep 122900000; owner earnings 265900000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); FY2026: growth capex 0; upkeep 118800000; owner earnings 301360000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); Dividend observations: [[2017,110600000],[2018,156700000],[2019,174900000],[2020,90700000],[2021,153600000],[2022,171400000],[2023,125400000],[2024,107000000],[2025,158800000],[2026,189100000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); FY2026: cash repurchases 96500000 AUD.

### Are managers owners

Insiders own 0.5% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DOW.AU SharesStats.PercentInsiders = 0.5479999999999999 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 10.5% yearly over ten years; actual decline was 1.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:39:08.333Z); Ten-year compound average after fade. Initial solved rate 0.1378222757739359. Price 6.88; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 0.5126411734146228 → FY2026 0.45517928046148676. Closing-price date 2026-10-15.

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

- 2016-10: AUD 5.40 per share

- 2016-11: AUD 5.25 per share

- 2016-12: AUD 5.64 per share

- 2017-01: AUD 5.74 per share

- 2017-02: AUD 6.51 per share

- 2017-03: AUD 5.68 per share

- 2017-04: AUD 5.77 per share

- 2017-05: AUD 6.28 per share

- 2017-06: AUD 6.29 per share

- 2017-07: AUD 6.24 per share

- 2017-08: AUD 6.99 per share

- 2017-09: AUD 6.65 per share

- 2017-10: AUD 6.86 per share

- 2017-11: AUD 6.88 per share

- 2017-12: AUD 6.80 per share

- 2018-01: AUD 6.60 per share

- 2018-02: AUD 6.80 per share

- 2018-03: AUD 6.29 per share

- 2018-04: AUD 6.75 per share

- 2018-05: AUD 6.89 per share

- 2018-06: AUD 6.66 per share

- 2018-07: AUD 7.25 per share

- 2018-08: AUD 7.58 per share

- 2018-09: AUD 7.75 per share

- 2018-10: AUD 6.79 per share

- 2018-11: AUD 6.16 per share

- 2018-12: AUD 6.64 per share

- 2019-01: AUD 7.02 per share

- 2019-02: AUD 7.30 per share

- 2019-03: AUD 7.54 per share

- 2019-04: AUD 7.60 per share

- 2019-05: AUD 7.00 per share

- 2019-06: AUD 6.79 per share

- 2019-07: AUD 7.09 per share

- 2019-08: AUD 7.57 per share

- 2019-09: AUD 7.66 per share

- 2019-10: AUD 7.90 per share

- 2019-11: AUD 8.22 per share

- 2019-12: AUD 8.02 per share

- 2020-01: AUD 7.28 per share

- 2020-02: AUD 5.60 per share

- 2020-03: AUD 2.93 per share

- 2020-04: AUD 4.09 per share

- 2020-05: AUD 4.43 per share

- 2020-06: AUD 4.30 per share

- 2020-07: AUD 4.11 per share

- 2020-08: AUD 4.49 per share

- 2020-09: AUD 4.40 per share

- 2020-10: AUD 4.40 per share

- 2020-11: AUD 5.20 per share

- 2020-12: AUD 5.33 per share

- 2021-01: AUD 5.16 per share

- 2021-02: AUD 5.15 per share

- 2021-03: AUD 5.13 per share

- 2021-04: AUD 5.63 per share

- 2021-05: AUD 5.57 per share

- 2021-06: AUD 5.59 per share

- 2021-07: AUD 5.28 per share

- 2021-08: AUD 6.51 per share

- 2021-09: AUD 6.46 per share

- 2021-10: AUD 6.30 per share

- 2021-11: AUD 5.68 per share

- 2021-12: AUD 5.96 per share

- 2022-01: AUD 5.41 per share

- 2022-02: AUD 5.04 per share

- 2022-03: AUD 5.39 per share

- 2022-04: AUD 5.56 per share

- 2022-05: AUD 5.73 per share

- 2022-06: AUD 5.05 per share

- 2022-07: AUD 5.52 per share

- 2022-08: AUD 5.05 per share

- 2022-09: AUD 4.57 per share

- 2022-10: AUD 4.49 per share

- 2022-11: AUD 5.17 per share

- 2022-12: AUD 3.71 per share

- 2023-01: AUD 3.77 per share

- 2023-02: AUD 3.16 per share

- 2023-03: AUD 3.43 per share

- 2023-04: AUD 3.55 per share

- 2023-05: AUD 3.59 per share

- 2023-06: AUD 4.11 per share

- 2023-07: AUD 4.39 per share

- 2023-08: AUD 4.28 per share

- 2023-09: AUD 4.12 per share

- 2023-10: AUD 3.77 per share

- 2023-11: AUD 4.24 per share

- 2023-12: AUD 4.40 per share

- 2024-01: AUD 4.21 per share

- 2024-02: AUD 4.98 per share

- 2024-03: AUD 5.10 per share

- 2024-04: AUD 4.72 per share

- 2024-05: AUD 4.80 per share

- 2024-06: AUD 4.64 per share

- 2024-07: AUD 4.99 per share

- 2024-08: AUD 5.59 per share

- 2024-09: AUD 5.48 per share

- 2024-10: AUD 5.61 per share

- 2024-11: AUD 5.75 per share

- 2024-12: AUD 5.25 per share

- 2025-01: AUD 5.73 per share

- 2025-02: AUD 5.53 per share

- 2025-03: AUD 5.42 per share

- 2025-04: AUD 5.71 per share

- 2025-05: AUD 6.08 per share

- 2025-06: AUD 6.31 per share

- 2025-07: AUD 6.91 per share

- 2025-08: AUD 7.23 per share

- 2025-09: AUD 7.37 per share

- 2025-10: AUD 7.73 per share

- 2025-11: AUD 7.91 per share

- 2025-12: AUD 7.95 per share

- 2026-01: AUD 8.05 per share

- 2026-02: AUD 8.59 per share

- 2026-03: AUD 7.66 per share

- 2026-04: AUD 7.41 per share

- 2026-05: AUD 8.13 per share

- 2026-06: AUD 8.05 per share

- 2026-07: AUD 7.78 per share

- 2026-08: AUD 6.55 per share

- 2026-09: AUD 6.82 per share

- 2026-10: AUD 6.91 per share

## Annual estimated value (AUD per share)

- FY2017: low AUD 4.85 per share, central AUD 5.36 per share, high AUD 6.03 per share

- FY2018: low AUD 6.38 per share, central AUD 7.32 per share, high AUD 8.41 per share

- FY2019: low AUD 7.20 per share, central AUD 8.09 per share, high AUD 9.27 per share

- FY2020: low AUD 4.20 per share, central AUD 4.71 per share, high AUD 5.40 per share

- FY2021: low AUD 4.23 per share, central AUD 4.70 per share, high AUD 5.33 per share

- FY2022: low AUD 2.34 per share, central AUD 2.57 per share, high AUD 2.86 per share

- FY2023: low AUD 2.62 per share, central AUD 2.86 per share, high AUD 3.17 per share

- FY2024: low AUD 2.67 per share, central AUD 2.91 per share, high AUD 3.22 per share

- FY2025: low AUD 3.54 per share, central AUD 3.90 per share, high AUD 4.38 per share

- FY2026: low AUD 3.29 per share, central AUD 3.63 per share, high AUD 4.08 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 2026-10-15T06:44:50.487Z 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.