This report is an updated version of the report published on 16 October 2025 at 12:15 PM AEDT.

EROAD Limited (ASX: ERD) 

EROAD Limited (ASX: ERD) is a technology-driven provider of tolling and fleet management solutions for the transport industry. It offers electronic on-board units and SaaS-based platforms across New Zealand, Australia, and North America.

Recommendation Rationale – SELL at AUD 2.570

• Trading Near Resistance: ERD’s share price is approaching its R2 level recommended on 06 October 2025. Therefore, share price can face resistance at the current levels.
• Decline in Cash Generation: Operating cash flow decreased to NZD 43.2mn in FY25, down from NZD 52.9mn in FY24, reflecting weaker cash generation. Additionally, cash and cash equivalents fell to NZD 13.8mn as of 30 June 2025 (FY24: NZD 14.5 million), indicating reduced liquidity.
• Property, Plant and Equipment Reduction: Property, plant and equipment decreased by NZD 6.5mn YoY in FY25 due to lower inventory from ongoing inventory management, partially offset by growth from new hardware leasing and the 4G hardware upgrade program.
• Overvalued Multiples: On a forward 12-month – key valuation multiple, Price/Earnings is higher than the median of the technology sector.
• Emerging Risks: The company faces rising cybersecurity threats, rapid technological shifts, tightening regulatory requirements, and supply chain challenges. Additionally, reliance on key markets and increased competition may pressure margins and hinder sustainable growth.

ERD Daily Chart

Valuation Methodology: EV/Sales Valuation Approach (FY March'26E) (Illustrative)

Stock might trade at a slight premium to its peers, considering the YoY increased revenue in FY25, growth in EBIT, higher free cash flow, ongoing technology investment and cost efficiency program, etc. For the valuation purpose, peers include NOVONIX Ltd (ASX: NVX), Rubicon Water Ltd (ASX: RWL), Codan Ltd (ASX: CDA), and others have been considered

Considering that the stock is approaching its R2 level, macroeconomic uncertainty, share price movement, current trading level, and risks associated, the share price can face consolidation at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 2.570, at 10:07 AM AEDT, as of 16 October 2025.

Note: This report may be updated with details around fundamental and technical analysis, price/ chart in due course, as appropriate.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 16 October 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.    

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.