You're fired! 6 ASX stocks to fire, 5 to hire (all-cap edition)

The February 2026 reporting season may have felt like a brutal start for some investors - especially those with big positions in CSL and Pro Medicus - but according to Macquarie Research, it finished far better than it began.

In short, the good outweighed the bad, which helps explain why the ASX 200 climbed to a record high. Net earnings per share (EPS) beats for the December half came in at +12%, but the real story was guidance.

“Guidance was a key positive, with net upgrades of +32% being the strongest in years, and a signal of the improving economy (and that guidance had been too conservative),” Macquarie said.

Large-cap industrials did the heavy lifting, while small caps were less convincing. The clearest theme, however, was AI: companies building AI infrastructure delivered the strongest beats and upgrades - and have outperformed AI-disrupted names by around 20% in 2026. If there was any doubt, Macquarie says AI has passed a tipping point.

With that in mind, we reached out to six fund managers to share their top stock to fire - and top stock to hire - now that the dust has settled.

Luke Laretive, Seneca Financial Solutions

Stock to fire - CBA (ASX: CBA)

The CBA result might have been publicly applauded, but as usual, the headlines obfuscate the reality.

Cycle-low impairment charges and a bumper result in the business bank drove a headline cash earnings beat of ~6%. But on our numbers, we see the core business as growing closer to 2% and view CBA as a bank with net interest margin pressure and facing rising competition.

As such, we can't rationalise (consensus estimates) paying ~3.6x price-to-book, +2 standard deviations above its 10-year average for a demographically challenged mortgage bank operating in an inflation-riddled, stalling Australian economy, with aggressive  - and in our view, superior - competition.

For the dividend-obsessed, it's trading on a 3% fully franked dividend... when the five-year Australian government bond is offering a risk-free 4.28% p.a.

Stock to hire - Australian Finance Group (ASX: AFG)

If you like businesses that operate in a deep niche, with reliable, growing recurring revenue, expanding margins and accelerating operating leverage, look no further than Australian Finance Group.

Australia's largest mortgage broker and aggregator recorded a 46% jump in profit on the back of 24% growth in the high margin AFG Securities business. This saw net interest margins expanding by 11 basis points.

The business is now running at 21% return on equity, a 6.7% fully franked dividend yield and all indications point to stronger, higher quality growth in FY27.

The scary thing is you can buy this on only 9.7x FY26 earnings, a discount to its 3-year average of 11.3x... despite it offering record and accelerating cash flow. Madness!

Michael Carmody, Centennial

Stock to fire - CSL (ASX: CSL)

CSL's share price has now fallen by more than 50% from its 2020 all-time highs. 

Declining product demand, slowing earnings growth, regulatory headwinds, asset impairments and restructuring costs have all contributed to the loss of investor confidence and the valuation decline at CSL.

While CSL’s 1H26 result wasn’t significantly below market expectations, the sudden retirement of the CEO the night before the result was released did shock investors.

Post the 1H result, we see CSL’s FY26 guidance as being an ambitious target for the company given the revenue growth implied for Immunoglobulin and Albumin in the 2H of the year.

While the company’s $100 million cost-out program will make an important contribution to the result, we continue to see risks associated with earnings falling short of market expectations this year.

Given the magnitude of the share price fall, it is reasonable to consider the risks and rewards of owning the stock at current levels.

While CSL has de-rated materially in the last two years, we are not convinced the company is immune to delivering further shareholder disappointment and believe it’s too early to be exposed to the stock.

At this point, the downside share price risk appears to outweigh the upside risk.

Stock to hire - Superloop (ASX: SLC)

History tells us that the share price benefits associated with a company exceeding consensus results expectations tend to continue over several months post the initial increase.

Superloop was a standout for us in the February season. The company delivered strong subscriber growth ahead of market estimates. Revenue was up 23% and underlying earnings before tax, interest, depreciation and amortisation (EBITDA) increased 46%.

The company delivered operating margin expansion and scale benefits during the period, and importantly, cash conversion was strong.

Accelerating wholesale and consumer demand and ongoing cost discipline positions the company well to exceed market expectations again at the full year FY26 result.

Post the result, underlying EBITDA guidance for FY26 was increased to reflect ongoing growth momentum in the business. We see the earnings guidance as being conservative given the subscriber growth momentum that was delivered in the 1H result.

In addition to the strong underlying operating result, Superloop announced the acquisition of Lightning Broadband. 

The acquisition strengthens the company’s market position in the “Fibre-To-The-Premises” market and accelerates its growth within the company’s “Smart Communities” division.

Phillip Li, SG Hiscock & Company

Stock to fire – Lifestyle Communities Ltd (ASX: LIC)

Victorian land-lease community developer Lifestyle Communities' 1H26 showed signs of stabilisation, but the forward outlook remains uncertain.

Management flagged "recent signs of softening consumer sentiment” - a notable shift from prior commentary about an emerging recovery, and one that listed land-lease peers with Victorian exposure are not echoing, suggesting challenges may be more company-specific than macro-driven.

The settlement pipeline remains fragile, with nearly half of FY26 contracts dependent on buyers selling their own homes in the very market that's softening.

No dividend was declared for a third consecutive period, and a binary Victorian Civil and Administrative Tribunal appeal in June adds further uncertainty around the deferred management fee model.

With the earnings inflection continually being pushed out, we continue to prefer playing this thematic through higher-quality peers in the land-lease sector.

Stock to hire – Superloop Limited (ASX: SLC)

One stock we added to during the half is challenger broadband provider Superloop, whose 1H26 result reinforced the thesis.

Subscriber growth continues to compound at a rate management themselves appear reluctant to flag - December net adds were double November's and they're now growing faster than any peer, with operating leverage building and AI-driven efficiencies still in early innings.

But the more interesting story is the recently acquired Lightning broadband network and what it means for Smart Communities. With 170k contracted lots and only ~24k currently active, there is a long runway of high-margin fibre connections yet to materialise.

As these lots activate, the earnings contribution - and implied valuation of this infrastructure-style asset - could look very different to what the market prices today. 

Investors familiar with how private markets have historically valued comparable fibre-to-the-premises networks in Australia would do well to spend more time here.

Emanuel Datt, Datt Capital

Stock to fire - Bapcor Limited (ASX: BAP)

Bapcor has shifted from a turnaround play to a cautionary tale of structural decline and balance sheet distress. The stock remains an avoid due to the challenges that remain internally and more broadly externally.

Bapcor shareholders have been significantly diluted following its planned $200 million capital raise announced in conjunction with its results to reduce its leverage. 

Whilst net leverage is expected to drop to 1.7x, this debt overhang remains high for a business tethered to the volatile discretionary retail sector.

The statutory loss of $104.8 million exposes deep-seated operational and cultural failures specifically in inventory management, employee retention and merchandising mix. This has caused underlying net profit after tax to collapse to just $5.5 million.

While new chief executive Chris Wilesmith brings significant experience, the path to recovery is obstructed by legacy enterprise resource planning systems and a difficult macro environment.

Without a radical, rapid simplification of its business, Bapcor may remain in limbo for some time.

Stock to hire - WiseTech Global (ASX: WTC)

The investment thesis for WiseTech Global rests on a structural shift in profitability, characterised by widening and positive jaws - where revenue growth significantly outpaces a contracting cost base.

WiseTech’s transition to a transaction-based pricing model decouples revenue from headcount. This ensures the company captures the upside of global trade volumes and customer productivity gains without incremental cost.

Simultaneously, management is executing a radical AI-driven transformation, targeting a 50% headcount reduction in product and customer service roles by FY27.

Historically, WiseTech has over-delivered on efficiency. The early realisation of $50 million in synergies from the e2open acquisition, 18 months ahead of schedule, further validates this track record of execution.

WiseTech has been built on deep vertical integration within the $11 trillion global logistics industry. The platform processes 90 million+ ocean containers and 80% of manufactured trade flows, creating a system of record that is nearly impossible to displace.

With churn rates below 1%, this mission critical software is essential for its clients. 

For the disciplined investor, WTC offers a rare combination: a mission-critical utility with the margin profile of a high-growth software scaler and a potential explosion in free cash generation driven by AI adoption and the new pricing model.

Romano Sala Tenna, Katana Asset Management

Stock to fire - Austin Engineering Limited (ASX: ANG)

Austin Engineering reset expectations in November, by downgrading FY26 earnings before interest and taxes (EBIT) from a range of $40-$46m to $30m-$34m.

It would therefore have been reasonable to assume that the results for the period ending just a few weeks later in December would have been largely in line with the revised guidance.

However, in a performance that would have embarrassed even Eddie the Eagle (look him up), the company announced a first-half EBIT of just $3m. This figure was down 83% on the prior corresponding period.

Needless to say, management further downgraded the already downgraded FY26 EBIT forecast to a paltry $14m-$16m.

At the current price, the company is trading below asset value. And there are a lot of things to like about the products and market position.

But until management can demonstrate that they have a handle on production and costs, discretion is the better part of valour.

Stock to hire - Judo Capital Holdings (ASX: JDO)

Judo reported a strong result, once again meeting or exceeding consensus forecasts. Gross loans and advances (GLA) grew 7% half-on-half (hoh) to $13.4 billion. This generated significant operating leverage above the largely fixed cost base.

Profit before tax rose 26% hoh. Statutory net profit after tax grew 32% hoh or a mammoth 46% versus 1H 2025.

JDO is the fastest growing ADI in Australia by many multiples, and has a strong growth trajectory ahead.

The company has guided to a large uplift in profit before tax for FY26 of $180-$190m on GLA of $14.4bn to $14.7bn. Operating leverage will continue to improve with forecast GLA of $20bn over the medium term.

But more importantly, this is forecast to lead to a decline in the cost-to-income ratio from just under 50% to ‘approaching 30%’.

This dramatic improvement in operating leverage will see NPAT continue to grow significantly over the next 3-5 years.

Henry Jennings, Marcus Today

Stock to fire - Xero (ASX: XRO)

Even though it has fallen a long way, I still struggle with this one. The push into the US, with the Melio acquisition, is supposed to be going well. However, like many in the SaaS field, its business model is under threat.

There has always been a theory that it is a viral stock. Once a user is embedded in the XRO software, they never leave and tell their friends. However, progress to break into the U.S. has been slower than Cold Chisel’s in their heyday.

Although the Melio deal does give them a leg up, it was not cheap, and execution risk remains. 

Every broker loves it, but I see further downside in this environment. Melio is not expected to reach earnings before tax, interest, depreciation and amortisation- breakeven until 2H28. That feels a long way off.

And the ability to clip the ticket could come under threat before then. A lot is riding on its AI strategy. 

For now... I remain underwhelmed.

Stock to hire - BHP (ASX: BHP)

It may be the Big Australian, but I was very impressed with the BHP result.

Apart from the increase in the dividend, the focus on copper and its continued cost discipline, the silver stream deal was an excellent way for BHP to monetise assets that the market was giving it no credit for. It is equivalent to finding a hundred-dollar bill tucked down the back of the sofa!

The ability to unlock US$4.3bn in value from an upfront payment is a sign that BHP is thinking outside the box.

It's the second-biggest copper producer with over 50% of its revenue now coming from copper, the lowest-cost iron ore producer too and number four in uranium.

There's lots to like, and the Jansen potash mine in Canada will add more diversification to the business.

Quick reference: FIRE! vs HIRE!

Consider the opportunity cost