P10 Inc retains Overweight rating, stock price target from Stephens By Investing.com

On Tuesday, Stephens maintained its positive stance on P10 Inc (NYSE: NYSE:) shares, reiterating an Overweight rating and a $12.00 price target for the stock. The firm’s assessment followed P10’s inaugural Investor Day, which provided an overview of the company’s performance since its 2021 initial public offering and its future financial goals.

During the event, P10 Inc reviewed its progress, including leadership changes, acquisitions, and international growth efforts. The company highlighted a compound annual growth rate (CAGR) of over 25% in EBITDA since its IPO. Looking forward, P10 Inc set ambitious targets for 2029, aiming to more than double its fee-paying assets under management (FPAUM) and achieve an EBITDA margin in the mid-50% range, an increase from the current mid-40% margin.

Stephens underscored P10’s unique market position, focusing on the middle and lower-middle market sectors. The firm also praised the company’s proprietary data and robust financial profile, which includes a high degree of revenue visibility and recurring revenue streams, alongside strong EBITDA margins.

The analyst noted that P10 Inc’s stock presents an attractive buying opportunity, currently trading at approximately 12 times forward EBITDA. This valuation is below the peer average of around 15 times. Stephens expects the company to experience steady earnings growth driven organically, with the potential for additional growth through strategic mergers and acquisitions.

In other recent news, P10 Inc. has announced a significant acquisition of Madrid-based Qualitas Equity Funds SGEIC, S.A. for an initial $63 million. This move is expected to bolster P10’s European presence by adding approximately $1 billion in fee-paying assets under management and expanding its global client base by over 1,300 limited partners.

The transaction, anticipated to close in the first quarter of 2025, includes a mix of cash and P10 stock, with potential for additional earnout consideration tied to future fund revenue.

P10 also reported robust growth for Q2 2024, with a 14% increase in revenue to $71 million and substantial growth in fee-paying assets under management. Despite a slight 3% decrease in Fee-Related Earnings, the firm managed to raise and deploy $844 million in gross new assets under management. This indicates a strategic focus on expansion and growth.

In contrast, UBS has downgraded P10’s stock from Buy to Neutral, citing concerns about near-term earnings potential and valuation. UBS expects muted Fee-Related Earnings growth for P10 and potential impact of growth initiatives on near-term margins. These recent developments highlight the dual narrative of strategic expansion and potential near-term earnings concerns for P10 Inc.

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