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Ebos Group Ltd - Stock Quote EBO

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Morningstar's Ebos Group Ltd Stock Analysis

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Is it the right time to buy or sell?
Is it the right time to buy or sell?

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Economic Moat


Capital Allocation


As a Pharma Distributor Ebos Is Superior to Peers but Shares Remain Expensive

Shane Ponraj, CFA Equity Analyst

Analyst Note

| Shane Ponraj, CFA |

We maintain our AUD 27.50 (NZD 30.00) fair value and earnings estimates for narrow-moat Ebos Group. The shares have declined roughly 10% since April 2022, yet still screen as materially overvalued. We think the quality premium being paid by the market is disproportionate versus peers.

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Ebos Group Ltd's Company Profile

Business Description

EBOS is the largest pharmaceutical wholesaler and distributor across Australia and New Zealand. It services community pharmacies and hospitals, which contribute around 60% and 30% of revenue respectively. Drug pricing and wholesale margins for PBS medicine are governed by the Australian government’s Pharmaceutical Benefits Scheme, or PBS. Wholesale gross margins are capped at 7% for community pharmacy and 10% for hospitals, and ongoing price reform typically results in low single digit revenue growth. Aside from pharma distribution, EBOS operates an animal health product wholesale, manufacturing and retail business, as well as undertaking third party logistics services. These segments run at 5% and 8% of revenue respectively but due to the unregulated nature are higher-margin operations.

108 Wrights Road, P.O. Box 411
Christchurch, STL, 8024, New Zealand
T +64 33380999
Sector Healthcare
Industry Medical Distribution
Most Recent Earnings
Fiscal Year End Jun 30, 2022
Stock Type
Employees 3,700