Ann: FY19 Investor Presentation, page-29

The Morningstar price you refer too is a quantitative rating which is a mathematically-based/mechanistic rating. They lack any qualitative input from an analyst. The published price is one of fair value rather than a price target issued by a broker. It would be an interesting exercise to compare these quant ratings with Morningstar’s own qualitative research on each company.

Checking the CommSec site confirmed that the Morningstar fair value price is rated as $19.05 (or $19.15 depending on the screen viewed) and that the current share price of $7.08 falls within their estimate of fair value. This is a significant variance of 169%. The large fair value range is due I think to their uncertainty rating being one of extreme.

It is ludicrous in my opinion that Morningstar use a mechanical approach to ascribe a fair value or otherwise price rating to stocks which they then distribute widely. It is meaningless and therefore useless as this Example and many of my tech holdings demonstrate.

No doubt the universe of Morningstar qualitative researched companies is much smaller than the much larger quantitative pool of companies they publish. Which would explain why they continue to distribute.