ChallengerASX:CGF +2.60%58 Return-on-Tangible-Equity is 19.91% as of Dec. 2025, which is 113% above its 10-year median of 9.33. GuruFocus rates ASX:CGF with a GF Score™ of 58/100 and a GF Value™ of A$4.00 (Significantly Overvalued). The stock has 9 warning signs investors should review. Among 501 Insurance companies, Challenger ranks better than 51.3% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Challenger's annualized net income for the quarter that ended in Dec. 2025 was A$677 Mil. Challenger's average shareholder tangible equity for the quarter that ended in Dec. 2025 was A$3,403 Mil. Therefore, Challenger's annualized Return-on-Tangible-Equity for the quarter that ended in Dec. 2025 was 19.91%.
The historical rank and industry rank for Challenger's Return-on-Tangible-Equity or its related term are showing as below:
ASX:CGF'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: -14.67 Med: 9.33 Max: 20.12
Current: 13.67
During the past 13 years, Challenger's highest Return-on-Tangible-Equity was 20.12%. The lowest was -14.67%. And the median was 9.33%.
ASX:CGF's Return-on-Tangible-Equity is ranked better than 51.3% of 501
companies
in the Insurance industry
Industry Median: 13.51
vs ASX:CGF: 13.67
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Challenger Return-on-Tangible-Equity Related Terms
Challenger Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Challenger's Return-on-Tangible-Equity can be seen below:
* 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.
ASX:CGF vs AFL, MET, PRU: Return-on-Tangible-Equity Comparison
For the Insurance - Life subindustry, Challenger's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity vs Insurance Industry
For the Insurance industry and Financial Services sector, Challenger's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Challenger's Return-on-Tangible-Equity falls into.
* 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is two times the semi-annual (Dec. 2025) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 19.91% mean?
Challenger (ASX:CGF) has a Return-on-Tangible-Equity of 19.91% as of Dec. 2025. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Challenger and its competitors. This is 113% above median its historical median of 9.33. According to the industry distribution chart, Challenger ranks #244 out of 501 companies in the Insurance industry, placing it in the top 48.7%.
Is Challenger's Return-on-Tangible-Equity too high?
Challenger's current Return-on-Tangible-Equity of 19.91% is 113% above median its 10-year median of 9.33. The Insurance industry median Return-on-Tangible-Equity is 13.51. Challenger's value of 19.91% is 47.4% above this industry median. Based on the distribution chart, Challenger ranks #244 out of 501 companies in the Insurance industry, which is above the industry midpoint. Overall, Challenger has a GF Score™ of 58/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Challenger's Return-on-Tangible-Equity compare to AFL and MET?
According to the Insurance industry distribution chart, Challenger ranks #244 out of 501 companies for Return-on-Tangible-Equity. This puts Challenger in the upper half of its industry. The industry median Return-on-Tangible-Equity is 13.51. Challenger's value of 19.91% is 47.4% above this benchmark. While the company's 10-year median is 9.33 vs. the industry median of 13.51, Challenger has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Return-on-Tangible-Equity for an Insurance company?
The median Return-on-Tangible-Equity among Insurance companies is 13.51, based on 501 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Challenger's current Return-on-Tangible-Equity of 19.91% is 47.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Challenger and its competitors. For the Insurance industry, the median Return-on-Tangible-Equity is 13.51 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Challenger's current Return-on-Tangible-Equity is 19.91%, which is 113% above median its own 10-year median of 9.33. 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$4.00, compared to a current price of A$10.26 — trading 156.5% above its estimated fair value. The current Return-on-Tangible-Equity is 19.91%, which is 113% above median its 10-year median of 9.33 and 47.4% above the Insurance industry median of 13.51. Challenger's overall GF Score™ is 58/100 with 9 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Challenger (ASX:CGF), the current Return-on-Tangible-Equity is 19.91% 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$10.26 is trading 156.5% above its estimated GF Value™ of A$4.00.
GuruFocus considers Challenger to be Significantly Overvalued.
Key valuation signals for ASX:CGF:
Return-on-Tangible-Equity: 19.91% (113% above median its 10-year median of 9.33)
GF Value™: A$4.00 vs. price of A$10.26 (156.5% above fair value)
Industry Position: 47.4% above the Insurance median (#244 of 501)
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.
58GF Score
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