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Highlights
- A2 Milk shares surge nearly 39% year-to-date
- Woolworths trades 13% above its 52-week low
- Valuation metrics show both stocks above historic averages
Two household names on the ASX, The a2 Milk Company (A2M) and Woolworths Group (WOW), are catching investors' attention in 2025 for very different reasons. With notable price movement from both stocks, understanding how to gauge their current value could help in interpreting their market standing.
A2 Milk’s Recent Run-Up
Founded in New Zealand in 2000, The a2 Milk Company (ASX:A2M) focuses on dairy products containing only the A2 protein, which some studies suggest may be easier to digest than conventional A1 protein products. While scientific consensus remains mixed, several randomized trials have indicated positive results for those with digestive discomfort linked to regular dairy.
a2 Milk’s business model is centered on marketing and distribution, leaving the production to supply partners across over 25 certified farms in Australia. A significant part of its revenue comes from infant formula, manufactured by its long-term New Zealand partner Synlait Milk.
Since the beginning of 2025, A2M shares have climbed 38.8%, reflecting renewed market confidence in the brand’s positioning and growth outlook. When using a simple valuation measure like the price-to-sales (P/S) ratio, A2M currently trades at 4.15x sales, above its five-year average of 3.44x. This suggests the market is assigning a premium to its shares, likely due to a solid revenue uptrend seen over recent years.
Woolworths: A Defensive Giant
Woolworths Group (ASX:WOW), established in 1924, is one of Australia’s largest retailers with a reach spanning over 3,000 stores and more than 100,000 employees. Best known for its supermarket chain, Woolworths also operates Big W and PFD, a B2B foodservice division.
The company’s dominant position in Australia’s grocery sector, with over 35% market share, provides a steady stream of income — especially appealing during periods of economic uncertainty. The defensive nature of its revenue base is supported by consistent demand for essential goods, often insulating the business from wider market volatility.
WOW shares are currently trading 13.4% above their 52-week low. Similar to A2M, Woolworths’ current valuation reflects a premium against certain historical metrics, partially due to its dependable income streams and reputation for fully franked dividend payouts.
