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Challenger has the Financial Strength Rank of 2. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.
Warning Sign:
Challenger Ltd displays poor financial strength. Usually, this is caused by too much debt for the company.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is rated on a scale of 1 to 10 and is based on these factors:
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.
4. Other debt related ratios.
A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Challenger did not have earnings to cover the interest expense.
Challenger's debt to revenue ratio for the quarter that ended in Dec. 2025 was 6.81.
As of today, Challenger's Altman Z-Score is 1.23.
The rank is rated on a scale of 1 to 10. A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Challenger has the Financial Strength Rank of 2. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.
Challenger Financial Strength Related Terms
ASX:CGF vs AFL, MET, PRU: Financial Strength Comparison
For the Insurance - Life subindustry, Challenger's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Challenger Financial Strength vs Insurance Industry
For the Insurance industry and Financial Services sector, Challenger's Financial Strength distribution charts can be found below:
* The bar in red indicates where Challenger's Financial Strength falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
Challenger has a Z-score of 1.23, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.
Warning Sign:
Altman Z-score of 1.23 is in distress zone. This implies bankruptcy possibility in the next two years.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Challenger (ASX:CGF) has a Financial Strength of 2 as of Dec. 2025. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Challenger and its competitors. This is 33% below median its historical median of 3.00. Over the past decade, Challenger's Financial Strength has ranged from 2.00 to 4.00.
Is Challenger's Financial Strength too high?
Challenger's current Financial Strength of 2 is 33% below median its 10-year median of 3.00. Over the past 10 years, this metric has ranged from a low of 2.00 to a high of 4.00. Overall, Challenger has a GF Score™ of 52/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Challenger's Financial Strength compare to AFL and MET?
Challenger's Financial Strength of 2 can be compared against companies in the Insurance industry. Historically, Challenger's own Financial Strength has ranged from 2.00 to 4.00 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Financial Strength for an Insurance company?
A good Financial Strength depends on the Insurance industry context. However, Financial Strength should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Financial Strength mean?
A high Financial Strength can signal that a stock is expensive relative to its fundamentals. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Challenger and its competitors. Challenger's current Financial Strength is 2, which is 33% below median its own 10-year median of 3.00. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Challenger stock overvalued right now?
Based on GuruFocus' analysis, Challenger (ASX:CGF) is currently considered Significantly Overvalued. The stock's GF Value™ is A$4.02, compared to a current price of A$9.99 — trading 148.5% above its estimated fair value. The current Financial Strength is 2, which is 33% below median its 10-year median of 3.00. Challenger's overall GF Score™ is 52/100 with 8 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Financial Strength calculated?
Financial Strength is calculated from a company's financial statements. For Challenger (ASX:CGF), the current Financial Strength is 2 as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Challenger (ASX:CGF) Overvalued in 2026?
Based on GuruFocus' analysis, Challenger stock appears to be overvalued.
The current stock price of A$9.99 is trading 148.5% above its estimated GF Value™ of A$4.02.
GuruFocus considers Challenger to be Significantly Overvalued.
Key valuation signals for ASX:CGF:
Financial Strength: 2 (33% below median its 10-year median of 3.00)
GF Value™: A$4.02 vs. price of A$9.99 (148.5% above fair value)
No single metric tells the full story. See the ASX:CGF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Challenger's core business is selling annuity products in the Australian retirement market and, since November 2016, selling Australian dollar-denominated annuities into Japan's large retirement market. The firm's annuity products provide investors guaranteed regular payments over an agreed term for an upfront lump sum investment and is designed primarily to protect investors from the longevity risk of outliving their savings. Challenger also operates a funds management business, Fidante Partners, which has minority stakes in several boutique global investment managers, and Challenger Investment Management, which primarily manages investments supporting its annuities business.
52GF Score
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