SERVICE STREAM LIMITED (SSM)
Share Price Analysis and Chart

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20/08/2026

1

Overweight

$2.90

17.41%

Service Stream's FY26 result beat Morgan Stanley across revenue, EBITDA and NPAT, with Transport and Defence performing particularly well and 2H26 margins also exceeding expectations.

The broker sees solid growth visibility from an elevated tender pipeline, with no major renewals or project completions in FY27.

The Defence ramp-up, where management reiterated around $240m of annual revenue and margins are already approaching steady-state levels.

Morgan Stanley lifts FY27-FY28 EPS forecasts by 4%-6%, while seeing medium-term upside from new Defence and Social Infrastructure opportunities, although FY27 earnings are likely to be 2H weighted and SaaS investment is expected to peak at around $22m.

The broker retains Overweight and raises its target to $2.90 from $2.80. Industry View: In-Line.

FORECAST
Morgan Stanley forecasts a full year FY27 dividend of 7.30 cents and EPS of 14.00 cents.
Morgan Stanley forecasts a full year FY28 dividend of 7.80 cents and EPS of 15.00 cents.

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24/08/2026

1

Buy

$2.90

17.41%

Canaccord Genuity maintains its Buy recommendation for Service Stream with its target price increased to $2.90 from $2.70 following a strong FY26 result, reporting underlying EBITDA of $163.4m, which was up 11.8% on the prior corresponding period and 3% ahead of consensus estimates.

The outperformance was driven by an EBITDA margin expansion of 130 basis points to 6.6%, supported by improved second-half margins across all divisions, a positive contribution from Defence, and a -35% reduction in corporate overheads.

Management notes that Defence operations successfully achieved their initial annual revenue run-rate of $240m upon exit, while Utilities breached 6% margins twelve months ahead of schedule.

The broker's estimates incorporate EBITDA upward revisions across FY27 and FY28 by 1.6% and 2.5% respectively, underpinned by high work in hand of $8.2bn with approximately 85% of FY27 budgeted revenues locked in.

The analyst highlights that solid operating leverage, strong cash conversion, and robust momentum across utility and communication sectors position the stock favourably.

FORECAST
Canaccord Genuity forecasts a full year FY27 dividend of 8.00 cents and EPS of 14.55 cents.
Canaccord Genuity forecasts a full year FY28 dividend of 8.75 cents and EPS of 15.71 cents.