# Fortescue (FMG.AU)

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

Analysis as of: 2026-10-16T07:34:16.513Z. Financial observations: FY1997–FY2026.

Listing currency: AUD. Reporting currency: USD.

## 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 15.02 per share; close as of 2026-10-15.

Estimated value: low AUD 21.32 per share, central AUD 26.48 per share, high AUD 30.55 per share. Buy at or below the central value AUD 26.48 per share. Valuation as of 2026-10-16T07:34:16.513Z; scenarios are not confidence intervals.

Expected annual return: 16.2% at the stated quote. About 16.2% 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: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.28×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.41×

- FY2018: 0.26×

- FY2019: 0.48×

- FY2020: 0.54×

- FY2021: 0.67×

- FY2022: 0.52×

- FY2023: 0.42×

- FY2024: 0.47×

- FY2025: 0.34×

- FY2026: 0.27×

### moat: fail

- Recent gross margin fell 10.4pp below the typical margin (limit 4pp)

- ROIC, median of available years: 26.0%

- ROIC, second-lowest year: 14.2%

- Typical minus recent gross margin: 10.4 pp

- Typical gross margin (annual median): 50.5%

- Recent gross margin (lower of latest and 3-year median): 40.1%

- Years with nonpositive capital: 0

- Capital spending / revenue: 15.4%

- ROIC including acquisitions, ten-year median: 22.4%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 19.7%

- FY2018: 9.5%

- FY2019: 26.0%

- FY2020: 35.7%

- FY2021: 71.1%

- FY2022: 35.0%

- FY2023: 25.9%

- FY2024: 29.2%

- FY2025: 16.8%

- FY2026: 14.2%

### economics: pass

- Owner earnings / net income, 5-yr: 0.82×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $19B

- Net income, five-year total: $23B

- Return on incremental invested capital: 24.8%

- Working capital / revenue, annual change: -0.2 pp

- Working capital / revenue, change between three-year averages: -1.8 pp

- Working capital / revenue, final three-year average: 6.9%

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

- FY2022: 0.77×

- FY2023: 0.70×

- FY2024: 0.97×

- FY2025: 0.70×

- FY2026: 0.96×

### management: pass

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

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 19.7% vs 16.8%

- Per-share earnings: 0.31 to 1.09 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.1%

- Ordinary dilution, 5-year annual growth: -0.0%

- Market cap gain: $30B

- Cumulative retained earnings: $11B

- Diluted shares, 10-year annual growth: -0.1%

- Diluted shares, 5-year annual growth: -0.0%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 16.9%

- Per-share value change: $0.78

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

- Per-share value, ending three-year median: $1.09

- Buybacks concentrated in cheaper years (correlation): -0.33

- Average buyback yield: 0.3%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $729M

- Cumulative net income, 10 years: $44B

- ROIC, first three-year median: 19.7%

- ROIC, last three-year median: 16.8%

Chart: Earnings per share; fiscal year observations.

- FY2017: $0.67

- FY2018: $0.28

- FY2019: $1.03

- FY2020: $1.53

- FY2021: $3.34

- FY2022: $2.01

- FY2023: $1.56

- FY2024: $1.84

- FY2025: $1.09

- FY2026: $0.93

### accounting: pass

- Sloan accruals: -12.5%

- Receivables to sales index (DSRI): 1.01×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.42×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.03×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -11.1%

- FY2018: -2.2%

- FY2019: -5.3%

- FY2020: -18.8%

- FY2021: -22.3%

- FY2022: -11.8%

- FY2023: -22.0%

- FY2024: -7.4%

- FY2025: -10.2%

- FY2026: -12.5%

## Holders

## Price story

Down 50% since Jan 2024 · "Fortescue Profit Slides on Lower Iron Ore Prices" (finance.yahoo.com, Aug 2025) · sales +9.2%

Story as of 2026-10-16T09:59:59.949Z; price observation 2026-10-15.

Price needs cash profits to shrink 4.4% a year for ten years

- 2025-07-23: Fortescue shares up on iron ore beat; scraps US, Aussie green hydrogen projects ([finance.yahoo.com](https://finance.yahoo.com/news/fortescue-iron-ore-shipments-rise-230028043.html))

- 2025-08-26: Fortescue Profit Slides on Lower Iron Ore Prices ([finance.yahoo.com](https://finance.yahoo.com/video/fortescue-profit-slides-lower-iron-055541019.html))

- 2026-07-02: Fortescue shares fall as China reportedly restricts iron ore shipments (FSUGY) ([finance.yahoo.com](https://finance.yahoo.com/markets/commodities/articles/fortescue-shares-fall-china-reportedly-094721004.html))

### Sales · FY2025–2026

sales +9.2%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2017: $8.5B 

- FY2018: $6.8B 

- FY2019: $9.7B 

- FY2020: $13B 

- FY2021: $22B 

- FY2022: $17B 

- FY2023: $17B 

- FY2024: $18B 

- FY2025: $16B 

- FY2026: $17B 

### Gross margin · FY2026

gross margin 40.1%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2017: 40.5% 

- FY2018: 25.3% 

- FY2019: 48.6% 

- FY2020: 65.9% 

- FY2021: 69.1% 

- FY2022: 56.3% 

- FY2023: 53.7% 

- FY2024: 52.4% 

- FY2025: 41.4% 

- FY2026: 40.1% 

## Owner memo

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

### How it makes money

Operates in other industrial metals & mining; annual sales are USD 17 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2026: revenue 16966000000; grossProfit 6811000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 40.1% to 52.4% during 2024–26; it earns 26% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2024: grossProfit / revenue = 52.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2025: grossProfit / revenue = 41.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2026: grossProfit / revenue = 40.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); 10-year return on capital observations [[2017,0.19739021858469563],[2018,0.09538898279705056],[2019,0.26008052835644396],[2020,0.35667127088529194],[2021,0.7107485003040008],[2022,0.3496961289585874],[2023,0.2592266852865957],[2024,0.29177875600316044],[2025,0.16808859825717237],[2026,0.14211942395854038]]; median 0.25965360682151983. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 22.4% of cash earnings on expansion; earns 24.8% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2017: growth capex 0; upkeep 739951807; owner earnings 2542867747. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2018: growth capex 0; upkeep 855932344; owner earnings 1286622779. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2019: growth capex 0; upkeep 1024391964; owner earnings 3139325549.502. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2020: growth capex 478296912; upkeep 1466703088; owner earnings 4478843800.088. Growth capex / owner earnings = 0.10679026403881342.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2021: growth capex 1977182955; upkeep 1404817045; owner earnings 10133000000. Growth capex / owner earnings = 0.19512315750518108.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2022: growth capex 0; upkeep 2803000000; owner earnings 4770031400. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2023: growth capex 0; upkeep 2901000000; owner earnings 3336200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2024: growth capex 842000000; upkeep 1992000000; owner earnings 5520000000. Growth capex / owner earnings = 0.15253623188405796.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2025: growth capex 0; upkeep 3238000000; owner earnings 2356200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2026: growth capex 615462794; upkeep 2711000000; owner earnings 2744200000. Growth capex / owner earnings = 0.22427767436775745.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); Incremental return on capital 0.24775901742971468, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); Dividend observations: [[2017,577938784],[2018,643336250],[2019,2220000000],[2020,1925000000],[2021,5684000000],[2022,6699000000],[2023,3922000000],[2024,4140000000],[2025,2851000000],[2026,2584523628]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); FY2026: cash repurchases 160446899 USD.

### Are managers owners

Insiders own 48.8% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); FMG.AU SharesStats.PercentInsiders = 48.842999999999996 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits shrink 4.4% yearly over ten years; actual growth was 4.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:16.513Z); Ten-year compound average after fade. Initial solved rate -0.07518271023127115. Price 15.02; FX 1.4454626926079037; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 0.5965690278115521 → FY2026 0.8903633754563915. Closing-price date 2026-10-15.

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

- 2016-10: AUD 5.50 per share

- 2016-11: AUD 5.87 per share

- 2016-12: AUD 5.89 per share

- 2017-01: AUD 6.66 per share

- 2017-02: AUD 6.63 per share

- 2017-03: AUD 6.23 per share

- 2017-04: AUD 5.31 per share

- 2017-05: AUD 4.85 per share

- 2017-06: AUD 5.22 per share

- 2017-07: AUD 5.74 per share

- 2017-08: AUD 6.01 per share

- 2017-09: AUD 5.14 per share

- 2017-10: AUD 4.64 per share

- 2017-11: AUD 4.60 per share

- 2017-12: AUD 4.88 per share

- 2018-01: AUD 4.96 per share

- 2018-02: AUD 5.04 per share

- 2018-03: AUD 4.33 per share

- 2018-04: AUD 4.56 per share

- 2018-05: AUD 4.69 per share

- 2018-06: AUD 4.39 per share

- 2018-07: AUD 4.37 per share

- 2018-08: AUD 3.84 per share

- 2018-09: AUD 3.92 per share

- 2018-10: AUD 4.00 per share

- 2018-11: AUD 4.00 per share

- 2018-12: AUD 4.19 per share

- 2019-01: AUD 5.65 per share

- 2019-02: AUD 6.06 per share

- 2019-03: AUD 7.11 per share

- 2019-04: AUD 7.15 per share

- 2019-05: AUD 8.05 per share

- 2019-06: AUD 9.02 per share

- 2019-07: AUD 8.33 per share

- 2019-08: AUD 8.00 per share

- 2019-09: AUD 8.80 per share

- 2019-10: AUD 8.91 per share

- 2019-11: AUD 9.73 per share

- 2019-12: AUD 10.69 per share

- 2020-01: AUD 11.39 per share

- 2020-02: AUD 10.08 per share

- 2020-03: AUD 10.00 per share

- 2020-04: AUD 11.96 per share

- 2020-05: AUD 13.90 per share

- 2020-06: AUD 13.85 per share

- 2020-07: AUD 17.41 per share

- 2020-08: AUD 17.42 per share

- 2020-09: AUD 16.30 per share

- 2020-10: AUD 17.37 per share

- 2020-11: AUD 18.23 per share

- 2020-12: AUD 23.43 per share

- 2021-01: AUD 21.79 per share

- 2021-02: AUD 24.11 per share

- 2021-03: AUD 19.99 per share

- 2021-04: AUD 22.59 per share

- 2021-05: AUD 22.43 per share

- 2021-06: AUD 23.34 per share

- 2021-07: AUD 24.91 per share

- 2021-08: AUD 21.00 per share

- 2021-09: AUD 14.96 per share

- 2021-10: AUD 13.93 per share

- 2021-11: AUD 17.01 per share

- 2021-12: AUD 19.21 per share

- 2022-01: AUD 19.87 per share

- 2022-02: AUD 18.15 per share

- 2022-03: AUD 20.66 per share

- 2022-04: AUD 21.63 per share

- 2022-05: AUD 20.11 per share

- 2022-06: AUD 17.53 per share

- 2022-07: AUD 18.34 per share

- 2022-08: AUD 18.42 per share

- 2022-09: AUD 16.82 per share

- 2022-10: AUD 14.70 per share

- 2022-11: AUD 19.38 per share

- 2022-12: AUD 20.51 per share

- 2023-01: AUD 22.24 per share

- 2023-02: AUD 21.40 per share

- 2023-03: AUD 22.49 per share

- 2023-04: AUD 20.94 per share

- 2023-05: AUD 19.22 per share

- 2023-06: AUD 22.18 per share

- 2023-07: AUD 21.68 per share

- 2023-08: AUD 21.43 per share

- 2023-09: AUD 20.92 per share

- 2023-10: AUD 22.30 per share

- 2023-11: AUD 24.99 per share

- 2023-12: AUD 29.02 per share

- 2024-01: AUD 29.88 per share

- 2024-02: AUD 25.93 per share

- 2024-03: AUD 25.70 per share

- 2024-04: AUD 26.05 per share

- 2024-05: AUD 24.74 per share

- 2024-06: AUD 21.41 per share

- 2024-07: AUD 18.87 per share

- 2024-08: AUD 18.27 per share

- 2024-09: AUD 20.68 per share

- 2024-10: AUD 19.17 per share

- 2024-11: AUD 18.99 per share

- 2024-12: AUD 18.25 per share

- 2025-01: AUD 19.13 per share

- 2025-02: AUD 16.51 per share

- 2025-03: AUD 15.37 per share

- 2025-04: AUD 16.19 per share

- 2025-05: AUD 15.39 per share

- 2025-06: AUD 15.28 per share

- 2025-07: AUD 17.77 per share

- 2025-08: AUD 19.30 per share

- 2025-09: AUD 18.68 per share

- 2025-10: AUD 21.29 per share

- 2025-11: AUD 21.41 per share

- 2025-12: AUD 22.01 per share

- 2026-01: AUD 21.00 per share

- 2026-02: AUD 21.14 per share

- 2026-03: AUD 20.31 per share

- 2026-04: AUD 19.65 per share

- 2026-05: AUD 22.31 per share

- 2026-06: AUD 19.15 per share

- 2026-07: AUD 18.51 per share

- 2026-08: AUD 17.70 per share

- 2026-09: AUD 16.44 per share

- 2026-10: AUD 15.32 per share

## Annual estimated value (AUD per share)

- FY2017: low AUD 10.83 per share, central AUD 12.22 per share, high AUD 14.06 per share

- FY2018: low AUD 8.46 per share, central AUD 9.58 per share, high AUD 11.08 per share

- FY2019: low AUD 17.00 per share, central AUD 23.95 per share, high AUD 27.99 per share

- FY2020: low AUD 26.62 per share, central AUD 37.09 per share, high AUD 43.19 per share

- FY2021: low AUD 49.14 per share, central AUD 68.89 per share, high AUD 80.39 per share

- FY2022: low AUD 37.85 per share, central AUD 53.10 per share, high AUD 61.97 per share

- FY2023: low AUD 35.77 per share, central AUD 49.22 per share, high AUD 57.43 per share

- FY2024: low AUD 30.43 per share, central AUD 34.33 per share, high AUD 39.53 per share

- FY2025: low AUD 23.83 per share, central AUD 26.86 per share, high AUD 30.89 per share

- FY2026: low AUD 21.32 per share, central AUD 26.48 per share, high AUD 30.55 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

## 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.