CPU

 CPU Computershare

05 july 2026

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Over the last 5 years, ASX:CPU (Computershare) delivered strong returns, heavily boosted by rising global interest rates which significantly increased margin income. Profitability and capital efficiency have been high, balance sheet debt has been reduced, and the company is trading around the high-$30s. [1, 2, 3]

Financial Performance (5-Year Overview)

• Profit & Revenue: Computershare benefited massively from the higher interest rate environment starting in 2022, which drove immense margin income on client balances. For the 1H 2026, the company reported revenues of $1.58B (US) and management EPS of $0.48 (US), showing continued operational expansion and upgrading full-year Management EPS guidance to 144 cents. [1, 2]

• Debt: The company has been actively deleveraging. Debt-to-EBITDA leverage has been comfortably reduced, sitting at around 0.3x as of early 2026. Their strong free cash flow has allowed them to pursue capital management initiatives, including significant share buybacks. [1, 2, 3]
• Return on Equity (ROE): CPU has consistently delivered superior capital efficiency. Their Return on Equity (ROE) has frequently hovered around the \(25\%\) to \(38\%\) mark in recent years. [1, 2, 3]

• Share Price: Reflecting these structural tailwinds, CPU shares have climbed approximately (145%) over the last 5 years. [1]

The price as of july 2026 is around $39. Its a bit too expensive for my liking.

Buy around $28 (Seems far away but it was there in March 2026)

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PE ratios

The 10-year historical mean Price-to-Earnings (P/E) ratio for Computershare Limited (ASX: CPU) is 26.76x, with the company currently trading at a Trailing Twelve Months (TTM) P/E ratio of 25.14x. [1, 2]

Analyze the 10-Year P/E History

Computershare's valuation multiple has historically fluctuated alongside global interest rate cycles due to its massive "margin income" leverage (earning interest on cash held in escrow for client transactions). [1, 2]

• 10-Year Mean P/E: 26.76x
• 10-Year Median P/E: 24.57x
• 10-Year High: 83.29x (Dec 2014)
• 10-Year Low: 4.32x (June 2024 / statutory earnings volatility) [1]

Evaluate Annual P/E Ratios

The following table presents Computershare's approximate closing P/E ratios over the last decade, tracking the transition from long-term low interest rates to the recent high-rate tightening cycle: []

Year [1, 2, 3, 4]	Approximate P/E Ratio	Valuation Context
Current (Mid-2026)	25.14x	Stabilizing global interest rates.
2025	37.6x	Moderating inflation expectations.
2024	43.3x	Peaking cash rate boosting earnings.
2023	29.5x	Rapid global rate tightening cycle.
2022	59.5x	Post-COVID tech run and low rate base.
2021	41.4x	Record low global interest rates.
2020	19.3x	Initial pandemic-induced market crash.
2019	21.1x	Stable late-cycle macro environment.
2018	29.4x	Moderate margin income tailwinds.
2017	24.9x	Steady structural business growth.
2016	25.6x	Global stimulus and low yields.

Key Valuation Drivers to Consider

• The Margin Income Effect: When central banks hike interest rates, Computershare generates substantial unhedged interest income from its float. This often causes statutory earnings per share (EPS) to spike sharply, dragging the nominal P/E down rapidly, as observed in parts of 2023–2024. [1, 2, 3, 4]
• Forward Looking Valuation: Market analysts place less weight on statutory trailing spikes. Computershare's Forward P/E sits at a leaner 18.06x, reflecting consensus projections for an expected 31% expansion in earnings per share over the medium term. [1, 2]
• Peer Comparison: At roughly 25.5x, Computershare trades at an attractive discount relative to its immediate global capital market peers, which maintain an average P/E closer to 33.4x. [1]

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