Pexa Earnings: Downside Remains Limited Even With Continued Delays in UK

We maintain our AUD 17.25 per share fair value estimate for wide-moat Pexa with half-year results. The shares rallied more than 7% intraday on the result but remain materially undervalued. We think the market is overly focused on the loss-making UK business, and we think it’s unrealistic to expect large losses to continue indefinitely without a resolution. Given time is starting to run out for this expansion and success being a relatively binary outcome, we are increasing our Morningstar Uncertainty Rating to High.