Humm Earnings: Result Beats Expectations, but Market Excitement Is Premature

While no-moat Humm's fiscal 2024 results exceeded expectations, we think the fundamentals haven't improved as much as the share price reaction suggests. Normalized net profit after tax of AUD 61 million fell 19% from the prior year, but was still 63% above our forecast of AUD 37 million. The beat primarily came from lower expenses, driven by cost reductions in the point-of-sale payments segment, and lower impairments, now at a five-year low of 2.1% of average receivables and loans.