# Santos (STO.AU)

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

Analysis as of: 2026-10-16T07:34:47.627Z. Financial observations: FY1996–FY2025.

Listing currency: AUD. Reporting currency: USD.

## Verdict

Not a wonderful business

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

Share price: AUD 9.19 per share; close as of 2026-10-15.

Estimated value: low AUD 4.10 per share, central AUD 4.57 per share, high AUD 5.19 per share. Buy at or below the central value AUD 4.57 per share. Valuation as of 2026-10-16T07:34:47.627Z; scenarios are not confidence intervals.

Expected annual return: 6.1% at the stated quote. About 6.1% 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

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

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 5

- Years with a net loss: 3

- Operating margin variation: 0.36×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.08×

- FY2017: 0.19×

- FY2018: 0.31×

- FY2019: 0.29×

- FY2020: 0.18×

- FY2021: 0.32×

- FY2022: 0.46×

- FY2023: 0.34×

- FY2024: 0.30×

- FY2025: 0.27×

### moat: fail

- ROIC median below threshold

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

- Recent gross margin fell 20.5pp below the typical margin (limit 4pp)

- ROIC, median of available years: 5.9%

- ROIC, second-lowest year: 4.5%

- Typical minus recent gross margin: 20.5 pp

- Typical gross margin (annual median): 51.3%

- Recent gross margin (lower of latest and 3-year median): 30.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 22.7%

- ROIC including acquisitions, ten-year median: 3.3%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 1.6%

- FY2017: 5.1%

- FY2018: 7.2%

- FY2019: 7.2%

- FY2020: 4.5%

- FY2021: 5.7%

- FY2022: 15.4%

- FY2023: 8.6%

- FY2024: 6.1%

- FY2025: 4.8%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.78×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $4.9B

- Net income, five-year total: $6.3B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 0.4 pp

- Working capital / revenue, change between three-year averages: 3.5 pp

- Working capital / revenue, final three-year average: 12.9%

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

- FY2021: 0.95×

- FY2022: 1.09×

- FY2023: 0.65×

- FY2024: 0.39×

- FY2025: 0.70×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 5.1% vs 6.1%

- Per-share earnings: -0.57 to 0.38 (three-year endpoint medians)

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 9.5%

- Ordinary dilution, 5-year annual growth: 9.3%

- Market cap gain: $8.8B

- Cumulative retained earnings: $1.9B

- Diluted shares, 10-year annual growth: 9.5%

- Diluted shares, 5-year annual growth: 9.3%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: $0.95

- Per-share value, starting three-year median: -$0.57

- Per-share value, ending three-year median: $0.38

- Buybacks concentrated in cheaper years (correlation): 0.42

- Average buyback yield: 0.7%

- Buyback history: 9 years

- Debt-funded buybacks: No

- Acquisition spending: $3.1B

- Cumulative net income, 10 years: $5.8B

- ROIC, first three-year median: 5.1%

- ROIC, last three-year median: 6.1%

Chart: Earnings per share; fiscal year observations.

- FY2016: -$0.57

- FY2017: -$0.17

- FY2018: $0.30

- FY2019: $0.32

- FY2020: -$0.17

- FY2021: $0.30

- FY2022: $0.63

- FY2023: $0.43

- FY2024: $0.38

- FY2025: $0.26

### accounting: pass

- Sloan accruals: -5.6%

- Receivables to sales index (DSRI): 1.05×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 3.12×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.08×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -12.4%

- FY2017: -11.7%

- FY2018: -5.5%

- FY2019: -8.3%

- FY2020: -10.4%

- FY2021: -5.2%

- FY2022: -6.1%

- FY2023: -6.2%

- FY2024: -5.5%

- FY2025: -5.6%

## Holders

## Price story

Price needs cash profits to grow 10.8% a year for ten years · "Santos Delivers $508M Underlying Profit, Accelerates Pikka First Oil to 2026" (finance.yahoo.com, Aug 2025) · sales -2.7%

Story as of 2026-10-16T10:00:02.507Z; price observation 2026-10-15.

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

- 2025-08-25: Santos Delivers $508M Underlying Profit, Accelerates Pikka First Oil to 2026 ([finance.yahoo.com](https://finance.yahoo.com/news/santos-delivers-508m-underlying-profit-013000365.html))

- 2026-07-24: Santos Narrows 2026 Production Forecast ([finance.yahoo.com](https://finance.yahoo.com/energy/articles/santos-narrows-2026-production-forecast-165012788.html))

### Sales · FY2024–2025

sales -2.7%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: $2.6B 

- FY2017: $3.1B 

- FY2018: $3.7B 

- FY2019: $4.0B 

- FY2020: $3.4B 

- FY2021: $4.7B 

- FY2022: $7.8B 

- FY2023: $5.9B 

- FY2024: $5.4B 

- FY2025: $5.3B 

### Gross margin · FY2025

gross margin 30.8%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 45.4% 

- FY2017: 50.7% 

- FY2018: 55.0% 

- FY2019: 57.5% 

- FY2020: 51.9% 

- FY2021: 33.8% 

- FY2022: 72.4% 

- FY2023: 37.7% 

- FY2024: 68.4% 

- FY2025: 30.8% 

## Owner memo

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

### How it makes money

Operates in oil & gas e&p; annual sales are USD 5.3 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); FY2025: revenue 5259221031; grossProfit 1618540277; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 30.8% to 68.4% during 2023–25; it earns 5.9% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); FY2023: grossProfit / revenue = 37.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); FY2024: grossProfit / revenue = 68.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); FY2025: grossProfit / revenue = 30.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); 10-year return on capital observations [[2016,0.015599435825105782],[2017,0.05063780112490714],[2018,0.07208134204623037],[2019,0.07215645298947973],[2020,0.04451867338211537],[2021,0.05722454019815693],[2022,0.15364979899735362],[2023,0.08612727456113055],[2024,0.06117323945957982],[2025,0.04839304491931311]]; median 0.05919888982886838. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 27.9 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); FY2018: growth capex 0; upkeep 76000000; owner earnings 1221000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); FY2019: growth capex 0; upkeep 258000000; owner earnings 1292677133.886. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); FY2020: growth capex 0; upkeep 186000000; owner earnings 353329524.798. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); FY2021: growth capex 0; upkeep 1103000000; owner earnings 623400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); FY2022: growth capex 0; upkeep 1707000000; owner earnings 2292852323. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); FY2023: growth capex 0; upkeep 2369000000; owner earnings 925022832. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); FY2024: growth capex 0; upkeep 2401000000; owner earnings 472332372. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); FY2025: growth capex 0; upkeep 2002477903; owner earnings 590980942. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); Dividend observations: [[2016,43000000],[2017,73000000],[2018,73000000],[2019,251000000],[2020,136000000],[2021,221000000],[2022,536000000],[2023,777000000],[2024,991000000],[2025,796851671]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); FY2025: cash repurchases 27941551 USD.

### Are managers owners

Insiders own 0.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); STO.AU SharesStats.PercentInsiders = 0.12 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 10.8% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:47.627Z); Ten-year compound average after fade. Initial solved rate 0.1428095032232365. Price 9.19; FX 1.4454626926079037; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -2.7285103566128566 → FY2025 0.1815509423335369. Closing-price date 2026-10-15.

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

- 2016-10: AUD 3.57 per share

- 2016-11: AUD 3.93 per share

- 2016-12: AUD 4.02 per share

- 2017-01: AUD 4.00 per share

- 2017-02: AUD 3.80 per share

- 2017-03: AUD 3.80 per share

- 2017-04: AUD 3.48 per share

- 2017-05: AUD 3.36 per share

- 2017-06: AUD 3.03 per share

- 2017-07: AUD 3.39 per share

- 2017-08: AUD 3.76 per share

- 2017-09: AUD 4.02 per share

- 2017-10: AUD 4.50 per share

- 2017-11: AUD 5.08 per share

- 2017-12: AUD 5.45 per share

- 2018-01: AUD 5.10 per share

- 2018-02: AUD 5.04 per share

- 2018-03: AUD 5.07 per share

- 2018-04: AUD 6.14 per share

- 2018-05: AUD 5.86 per share

- 2018-06: AUD 6.27 per share

- 2018-07: AUD 6.38 per share

- 2018-08: AUD 6.78 per share

- 2018-09: AUD 7.26 per share

- 2018-10: AUD 6.64 per share

- 2018-11: AUD 5.52 per share

- 2018-12: AUD 5.48 per share

- 2019-01: AUD 6.47 per share

- 2019-02: AUD 6.92 per share

- 2019-03: AUD 6.83 per share

- 2019-04: AUD 7.19 per share

- 2019-05: AUD 6.74 per share

- 2019-06: AUD 7.08 per share

- 2019-07: AUD 7.23 per share

- 2019-08: AUD 7.21 per share

- 2019-09: AUD 7.73 per share

- 2019-10: AUD 8.12 per share

- 2019-11: AUD 8.15 per share

- 2019-12: AUD 8.18 per share

- 2020-01: AUD 8.69 per share

- 2020-02: AUD 6.83 per share

- 2020-03: AUD 3.42 per share

- 2020-04: AUD 4.94 per share

- 2020-05: AUD 5.36 per share

- 2020-06: AUD 5.30 per share

- 2020-07: AUD 5.27 per share

- 2020-08: AUD 5.67 per share

- 2020-09: AUD 4.88 per share

- 2020-10: AUD 4.73 per share

- 2020-11: AUD 6.16 per share

- 2020-12: AUD 6.27 per share

- 2021-01: AUD 6.51 per share

- 2021-02: AUD 7.23 per share

- 2021-03: AUD 7.10 per share

- 2021-04: AUD 6.98 per share

- 2021-05: AUD 6.77 per share

- 2021-06: AUD 7.09 per share

- 2021-07: AUD 6.45 per share

- 2021-08: AUD 6.05 per share

- 2021-09: AUD 7.17 per share

- 2021-10: AUD 6.98 per share

- 2021-11: AUD 6.38 per share

- 2021-12: AUD 6.31 per share

- 2022-01: AUD 7.14 per share

- 2022-02: AUD 7.26 per share

- 2022-03: AUD 7.74 per share

- 2022-04: AUD 8.00 per share

- 2022-05: AUD 8.20 per share

- 2022-06: AUD 7.42 per share

- 2022-07: AUD 7.30 per share

- 2022-08: AUD 7.89 per share

- 2022-09: AUD 7.09 per share

- 2022-10: AUD 7.70 per share

- 2022-11: AUD 7.40 per share

- 2022-12: AUD 7.14 per share

- 2023-01: AUD 7.11 per share

- 2023-02: AUD 7.00 per share

- 2023-03: AUD 6.90 per share

- 2023-04: AUD 7.07 per share

- 2023-05: AUD 7.29 per share

- 2023-06: AUD 7.52 per share

- 2023-07: AUD 7.96 per share

- 2023-08: AUD 7.67 per share

- 2023-09: AUD 7.90 per share

- 2023-10: AUD 7.67 per share

- 2023-11: AUD 6.91 per share

- 2023-12: AUD 7.60 per share

- 2024-01: AUD 7.85 per share

- 2024-02: AUD 7.08 per share

- 2024-03: AUD 7.75 per share

- 2024-04: AUD 7.70 per share

- 2024-05: AUD 7.63 per share

- 2024-06: AUD 7.66 per share

- 2024-07: AUD 7.99 per share

- 2024-08: AUD 7.22 per share

- 2024-09: AUD 7.02 per share

- 2024-10: AUD 6.78 per share

- 2024-11: AUD 6.61 per share

- 2024-12: AUD 6.68 per share

- 2025-01: AUD 7.05 per share

- 2025-02: AUD 6.54 per share

- 2025-03: AUD 6.66 per share

- 2025-04: AUD 6.01 per share

- 2025-05: AUD 6.59 per share

- 2025-06: AUD 7.66 per share

- 2025-07: AUD 7.87 per share

- 2025-08: AUD 8.02 per share

- 2025-09: AUD 6.73 per share

- 2025-10: AUD 6.31 per share

- 2025-11: AUD 6.44 per share

- 2025-12: AUD 6.17 per share

- 2026-01: AUD 7.01 per share

- 2026-02: AUD 6.76 per share

- 2026-03: AUD 7.96 per share

- 2026-04: AUD 8.00 per share

- 2026-05: AUD 7.81 per share

- 2026-06: AUD 7.21 per share

- 2026-07: AUD 7.84 per share

- 2026-08: AUD 8.14 per share

- 2026-09: AUD 8.62 per share

- 2026-10: AUD 8.91 per share

## Annual estimated value (AUD per share)

- FY2020: low AUD 3.54 per share, central AUD 3.91 per share, high AUD 4.40 per share

- FY2021: low AUD 6.31 per share, central AUD 6.92 per share, high AUD 7.74 per share

- FY2022: low AUD 11.86 per share, central AUD 13.36 per share, high AUD 15.35 per share

- FY2023: low AUD 5.44 per share, central AUD 6.06 per share, high AUD 6.88 per share

- FY2024: low AUD 4.24 per share, central AUD 4.72 per share, high AUD 5.35 per share

- FY2025: low AUD 4.09 per share, central AUD 4.56 per share, high AUD 5.18 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 2026-10-15T06:40:33.285Z 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.