No fireworks in early August results

The first 20 days of the August reporting season have only shown a limited sample of how corporate Australia is performing –the bulk of results is only just starting to descend upon us– but already there are plenty of signals for investors to take on board.

Against the background of fresh all-time highs for the ASX200, underlying it appears corporate Australia is not strong and healthy enough to handsomely beat rather mediocre forecasts.

On FNArena's assessments, the first 74 results of the season have generated 34% 'misses' (25 results) against 44.5% in-line reports (33 results) and only 21.5% (16 results) reporting better-than-expected.

What seems just a little bit worrisome is these numbers look underwhelming against comparables from the past three result seasons which were not very flash within the context of the past 14 years.

The argument that the local economy needs more RBA rate cutting, and maybe less uncertainty from tariffs and China-Russia-Israel-US tensions, would find solid support from the outcomes to date.

A lot can change, still. By early September more than 300 corporate results will have been added.

As things stand, August 2025 will mark the third year in succession of net negative earnings growth for the ASX200, currently estimated at -1.6%. The local average EPS will have declined by circa -19% since peaking in 2022.

Expectations are FY26 and FY27 should see net positive outcomes of (currently estimated) 4.5% and 7.5% respectively, though the underlying trend is still to the downside.

July and August are witnessing large investment portfolios rotating into smaller caps, resources, cyclicals and other laggards, suggesting market positioning is changing towards (anticipation of) a better environment in 2026.

Corporate results are never the sole determining factor, not even during reporting season, but large beats and misses can leave major imprints on share prices that last for months after the market update.

Compare The Pair

If I had to summarise the first half of this season, I'd go with Life 360 (ASX: 360) versus Qoria (ASX: QOR). 

Allow me to explain.

Life360 is a US-headquartered 'family safety' network developer that listed on the ASX in late 2018 and whose spectacular growth momentum has really captured investors' attention since 2023. Its share price has almost appreciated tenfold over the past 2.5 years.

Qoria, on the other hand, originally started life as Family Zone Cyber Safety in Perth in 2014. The current name was adopted in May 2023. Its existence on the ASX has followed a much less ebullient trajectory.

Even after a spectacular re-animation in 2025, its share price still has some work to do in order to surpass the two peaks recorded in July of 2017 and July of 2021.

The two businesses have some overlap, but are far from similar. Life360 offers an app in direct competition with Apple and Google and concentrates on families, including kids and pets and just about anything that can be traced and tracked.

Qoria specifically targets kids' safety and its service in the cloud (SaaS) runs through schools.

Life360 has become profitable, Qoria is not there yet. Life360 is growing much faster and is a much larger entity with quarterly sales larger than the circa $117m in revenues Qoria might announce for its full financial FY25 this month.

All of this easily explains why Life360's market cap of $10bn is more than ten times the size of Qoria's (less than $900m).

But here is where this story gets interesting. Because of past successes, Life360 shares are trading on what many would consider are elevated multiples.

Qoria's share price was broadly lingering, moving sideways until a market update in July which pulled in the buyers and almost literally injected a rocket under the share price.

Qoria shares have rallied in excess of 50% over the past number of weeks.

Before or after that market update, some tipsters had suggested investors should sell out of Life360 and swap it for the much cheaper-priced Qoria.

Investors who followed that advice are probably smiling today. Even if they didn't reap the full 50%-plus in gains, their timing has proved impeccable. Congratulations, and well done.

But that is only one limited way of looking at this.

Let's move back to Life360 and ignore for now the fact that shareholders missed out on a sizeable gain by sticking to their position.

As said, Life360 shares have almost risen by a factor of ten over the past 2.5 years, so there would be a lot of smiling faces among its shareholders too.

And it's not as if the Life360 share price hadn't moved pre-August either, with a total gain of 78% since January 1.

I can see the logic as to why the tipsters started looking for an alternative. Following such an enormous run, Life360 surely must run out of puff at some stage?

As it turns out, August 2025 wasn't going to be this company's Waterloo. Its Q2/mid-year market update has seen the share price adding some 15% over the following five days.

Analysts covering the company have yet again been forced to upgrade their forecasts, which has pushed up valuations and price targets for the twelve months ahead.

One key difference with Qoria is updated targets are still above the share price post rally.

Whether Qoria's FY25 update later this month might trigger a similar response is yet to be seen, but given its market update in July already included guidance for FY26, I'd be inclined to think it might not.

Currently, analysts' revised price targets are below where Qoria shares are trading.

The key question that arises from all of this is: who in this story should have the biggest smile?

Those investors who swapped Life360 for Qoria and made a quick killing or those who staid on board and saw their gains increase further?

The question is relevant because examples such as Qoria's tend to get a lot of media attention, similar to the 30%-plus gain for Coronado Global Resources shares or the 40%-plus reward for investors holding equity in Baby Bunting.

For companies such as Life360 any attention mostly goes out to its elevated multiples and when exactly mighty competitors such as Apple and Google might decide to kill its chances of survival?

I am by no means predicting that Life360 will never ever stumble or disappoint, and maybe Qoria is now embarking on a similar trajectory, but the past number of years have generated plenty of examples of companies growing strongly and continuing to do exactly that.

The likes of ResMed (RMD), REA Group (REA), TechOne (TNE), Xero (XRO) and others have maintained their positive trajectory for a lot longer than the past 2.5 years, but at its core their story is very much the same.

Ahead of every reporting season, one can sense the doubt and the criticism surrounding their share price, with tipsters suggesting maybe Bravura could be a better choice, or Nuix (NXL), or EML Payments (EML), but have a wild guess which share prices are today at or near an all-time record high?

So, instead of highlighting the random successes that can generate outsized returns from beaten-down market laggards on surprisingly better-than-feared market updates, let's shine a light on, and admire, the remarkable resilience from the ASX's highest quality growth businesses that yet again stand out from the crowd in this early phase of the current results season.

Expectations are well above average for these companies, and yet they very rarely mimic an Audinate Group (ASX: AD8) or Avita Medical (AVH).

If anything, in most reporting periods these companies shine through quality and excellence, usually forcing analysts to add-on to future growth projections.

Quality Among The Winners

The opening two weeks of August have already provided plenty of positive examples of multi-year strong performers that refuse to run out of oxygen.

Viewed from such angle, August 2025 is shaping up as a repeat of February this year, which repeated the experience of August last year, which roughly followed the script of February that year.

I think you get the picture. Financial results released by Nick Scali (NCK), Pinnacle Investment Management (PNI) and REA Group (ASX: REA) strictly taken did not beat expectations beforehand, but performances were solid enough to continue supporting their share prices.

Quality growers that did prove the sceptics wrong include Car Group (CAR), JB Hi-Fi (JBH), Pro Medicus (PME), ResMed, and Temple & Webster (ASX: TPW).

Cochlear's (COH) result did not excite the market, but there's clearly sufficient confidence that launches of Nexa system and Kanso 3 will re-initiate strong growth in 2H26 and beyond.

The one exception has been the shocker - potentially the shock of the season - delivered by CSL (CSL), which has now officially turned into a restructuring, 'value' recovering thesis.

Early signals are not looking very flash. I expect most quality growth companies to continue the positive balance to date.

Elsewhere, we will see more positive repeats of Baby Bunting and Coronado, but investors should equally expect to see a whole lot more disappointments, a la Audinate Group, James Hardie (JHX) and Bravura Solutions (ASX: BVS).

As always, the share market offers a true smorgasbord for all varieties in strategies and risk appetite, but maybe there is also an important lesson for investors to be reminded of?

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