Fund Manager Summary on Judo Capital Holdings Ltd (ASX:JDO)
In February 2026, Pendal Group commented that Judo Capital Holdings Ltd (ASX:JDO) delivered strong first‑half trends with 1H NPAT up 47% but the market focused on the lack of upside to guidance and on capital constraints (12.6% core tier one) that limit near‑term growth. Across fund managers the consensus is cautiously constructive with recent commentary weighted more heavily: January–February 2026 updates and Pendal’s AGM commentary point to improving loan and deposit momentum, a shifting funding mix and nascent margin recovery supporting medium‑term margin upside and operating leverage, while May–June 2025 reports from Yarra, Antares, Tyndall and Datt flagged lower than expected loan book growth, proactive book runoff, elevated funding cost risk and SME concentration that increase downside risk; actionable considerations for investors are to monitor capital trajectory and CET1 management, execution of deposit mobilisation to lower funding costs and boost NIM (management cites term deposits will lift margins but be reinvested into growth and costs), delivery on cost‑to‑income productivity to capture operating leverage, credit quality in the SME portfolio, and adherence to guidance (management reiterated FY26 PBT of $180–190m and the company recently traded around book value), with valuation described by some managers as attractive (PE ~11.5x–13x forward) but contingent on execution against these operational and capital constraints.
Commentary From The Managers
There are 9 insights from 6 fund managers regarding their investment in Judo Capital Holdings Ltd (ASX:JDO) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Pendal Group
23 Feb 2026
$1.75
Summary
- Pendal Group believes Judo Capital is positioned to benefit from strong SME credit demand and reduced lending competition, and continues to hold because current market pricing (c. 11.5x FY27 PE) does not fully reflect execution upside.
- Strong earnings momentum: 1H NPAT rose +47% year‑on‑year, demonstrating robust operating performance.
- Market reaction: The market focused on the lack of upside to guidance and consensus despite positive underlying trends.
- SME opportunity: A boom in SME credit and reduced lending competition creates a favourable environment for loan growth.
- Margin dynamics: Improved term deposit pricing should boost margins in 2H, but management intends to reinvest those gains into loan growth and costs, leaving profit guidance unchanged.
- Capital constraint: Core Tier 1 ratio of 12.6% is relatively tight, requiring careful management of growth versus returns.
- Valuation view: JDO is not priced for execution of its strategy; the current ~11.5x FY27 PE suggests upside if execution and capital management are successful.
- Key risk: Execution and capital management choices—particularly reinvesting margin gains—could limit near‑term earnings upside.
LSN Capital Partners
31 Jan 2026
$1.85
Summary
- LSN Capital Partners believes Judo Capital is positioned for material earnings upside and continues to hold because of strong H1 FY26 growth, reiterated full‑year guidance and clear operating leverage.
- Performance driver: Portfolio performance was driven by strong contributions from Judo Capital.
- Trading momentum: Judo Bank delivered positive trading updates during the month, reinforcing near‑term momentum.
- H1 FY26 results: Judo reported robust growth in the first half of FY26 and reiterated its full‑year guidance across key operating metrics.
- Operating leverage: The business is expected to demonstrate significant operating leverage in FY26, amplifying profit as revenues scale.
- Profit guidance: Judo remains on track to deliver profit before tax of $180–190m in FY26, up from $125.6m in FY25.
- Conviction factors: Continued holding reflects conviction in earnings momentum, guided visibility and scalable margins.
Pendal Group
27 Oct 2025
$1.76
Summary
- Pendal Group notes that Judo Capital (JDO) has delivered a solid AGM update.
- After a flat period of 6-12 months, loans are now growing more consistently, with 1Q annualising at 16%.
- Deposit growth has been even stronger, up 25% annualised, as JDO transitions to a cheaper, more stable funding base.
- Margins are improving, with lending spreads stable at 4.4%.
- Deposit spreads have improved from 99bp in 2H25 to mid-80s in 1Q.
- All of these developments are in line with guidance and consensus, providing reassurance compared to prior trends and market competition.
Antares Capital
30 June 2025
$1.57
Summary
- Judo Capital Holdings Ltd. (JDO) provided a market update in May regarding lending growth.
- It is unlikely to meet previously guided lending growth targets.
- The company cited US-instigated trade confusion as a factor impacting its performance.
- Following this update, shares weakened due to the implied downgrade in long-term targets.
- Antares Capital is reviewing its position in light of continued weak data released in June.
Yarra Capital Management
13 June 2025
$1.57
Summary
- Yarra Capital Management initiated a position in Judo Capital Holdings Ltd due to its significant growth potential in the SME market.
- Judo currently holds only 2% market share, indicating strong potential for market share growth.
- The fund manager believes Judo's superior service proposition will support its market share gains.
- Judo has margin upside, with net interest margins currently at cyclically depressed levels.
- There is potential to improve cost-to-income as productivity opportunities are rolled out.
- The business is viewed as highly attractive from a valuation perspective, trading around book value.
- This valuation is particularly appealing compared to major banks, which are trading at large premiums to book value.
Datt Capital
13 June 2025
$1.57
Summary
- Judo is a hold for Datt Capital.
- Judo is a specialist SME lender.
- During periods of economic uncertainty, the SME sector tends to suffer disproportionately.
- Judo's more concentrated loan book compared to major financiers presents a high-risk proposition.
- Challenges around costs of funding could impact Judo's margins.
- Thus, this investment remains a hold for Datt Capital.
Yarra Capital Management
31 May 2025
$1.39
Summary
- Judo Capital (JDO) underperformed in May due to a modestly negative trading update.
- The update reiterated guidance but moderated loan book size expectations.
- FY26 guidance provided was slightly below consensus.
- Higher loan book run-off was a key feature in the guidance downgrade.
- This run-off is partly attributed to proactive book management undertaken in 1H25.
- Despite the underperformance, Yarra Capital Management remains constructive on Judo’s medium-term opportunity.
- Yarra Capital Management added to their existing small position post trading update.
- Valuation support is seen as Judo is currently trading around book value.
Tyndall Asset Management
31 May 2025
$1.39
Summary
- Judo Bank underperformed for the month following FY26 guidance below market expectations.
- Lower loan book growth led to an anticipated 50% NPAT growth for FY26, compared to the market's expectation of 60%.
- Despite earnings downgrades, Tyndall Asset Management maintains that the investment thesis remains unchanged.
- The company is at an inflection point where operating leverage is expected to drive significant earnings growth over the next 5 years.
- Currently trading at 13x forward earnings, indicating that the market may not fully reflect this growth opportunity.
Yarra Capital Management
31 Aug 2024
$1.67
Summary
- Judo Capital Holdings (JDO) has outperformed following its FY24 results release.
- Reported a 20% increase in gross loans and advances (GLA).
- Underlying profit increased by 2%.
- Guidance for FY25 upgraded, expecting 15% growth in EBIT.
- Ongoing market share gains are anticipated.
- Term deposit market competition is lowering, creating funding opportunities for Judo.
- Yarra Capital Management continues to hold a position in Judo due to these factors.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Judo Capital Holdings Ltd (ASX:JDO)?
Fund managers including Yarra Capital Management, Datt Capital, Antares Capital, Tyndall Asset Management, Pendal Group and LSN Capital Partners have invested in Judo Capital Holdings Ltd (ASX:JDO).
Why do fund managers invest in Judo Capital Holdings Ltd?
Fund managers are interested in Judo Capital Holdings Ltd for several reasons. The company operates in the SME lending sector, which presents growth opportunities as it currently holds only 2% market share. Judo has potential for margin improvement, especially as net interest margins are presently low. Despite recent underperformance and a more concentrated loan book, its current valuation near book value is appealing compared to major banks. Ongoing improvements in loan and deposit growth support a constructive outlook.
What happened to Judo Capital Holdings Ltd (ASX:JDO)?
Fund managers, including Pendal Group, are investing in Judo Capital Holdings Ltd due to its recent strong performance indicators. Following a period of stagnation, the company is experiencing consistent loan growth, with a first-quarter annualization rate of 16%. Additionally, deposit growth has surged by 25%, aiding the transition to a more affordable and stable funding model. Margins show signs of improvement, with lending spreads stable at 4.4% and deposit spreads narrowing. This positive trajectory aligns with company guidance and market expectations, enhancing investor confidence.
What is the short interest in Judo Capital Holdings Ltd (ASX:JDO)?
The short interest in Judo Capital Holdings Ltd (ASX:JDO) is 1.60% which makes it the 162nd most shorted stock on the ASX. Of the 1.1B shares that Judo Capital Holdings Ltd has on issue, 18.0M have been sold short.
What does Judo Capital Holdings Ltd (ASX:JDO) do?
Judo Capital Holdings Ltd. provides financial services to small and medium enterprises. Its services include business loans, home loans, term deposits, lines of credit and residential mortgages. The company was founded by Christopher James Bayliss, Joseph Cornelius Healy and David Stephenson Hornery in 2015 and is headquartered in Melbourne, Australia.