JPMorgan cuts P10 stock target to $14.50, keeps Overweight rating

On Tuesday, JPMorgan analyst Kenneth Worthington revised the price target on P10 Inc (NYSE:PX) to $14.50, a slight decrease from the previous $15.00 target. Despite this adjustment, the firm maintains an Overweight rating on the company’s shares. Worthington’s commentary highlighted P10’s first quarter 2025 adjusted net income per share (ANI/sh) of $0.20, which fell short of the Bloomberg consensus of $0.21 but met JPMorgan’s own estimates.

P10 had previously indicated that catch-up fees in 2025 would be approximately $4-5 million, a significant drop from the robust $39 million recorded in 2024, which exceeded the management’s guidance of $16 million. Additionally, management forecasted a 2025 average fee rate, excluding direct and secondary catch-up fees, to be around 103 basis points (bps), a decrease from 107bps seen in the prior year.

The company’s first quarter results seemed to suggest potential deviations from the full-year guidance with $2.2 million in catch-up fees, a fee rate of 99bps, and stepdowns and expirations of $0.8 billion. However, management provided logical explanations for these figures, largely attributing them to seasonality and timing, and maintained its full-year guidance.

Worthington also noted several positive developments at P10, a firm focused on lower middle-market solutions. These include increased transparency in disclosures, expansion of products and distribution, enhancements in corporate governance with the appointment of two new independent directors, and a strategic approach to mergers and acquisitions. The analyst expressed approval of the acquisition of European solutions provider Qualitas and found management’s commentary on potential future acquisitions to be logical.

The report emphasized P10’s resilience against market slowdowns and geopolitical uncertainties, given its focus on the lower middle market, where portfolio companies are less reliant on public markets for exits. Worthington commended CEO Luke Sarsfield for his execution of the company’s objectives, as discussed in JPMorgan’s fourth quarter 2023 earnings review of P10.

In conclusion, the analyst reiterated confidence in P10’s growth trajectory and its ability to achieve the ambitious goal of doubling fee-paying assets under management (FPAUM) by 2029, as announced during the investor day in 2024. The new price target reflects a more conservative average fee rate than previously anticipated.

In other recent news, P10 Inc reported its Q1 2025 earnings, which fell short of expectations. The company’s earnings per share were $0.04, significantly below the forecasted $0.21, while revenue reached $67.7 million, missing the expected $70.1 million. Despite these results, P10 Inc saw a 2% year-over-year increase in revenue and a 10% growth in fee-paying assets under management, reaching $26.3 billion. The company also completed the acquisition of Qualitas Funds, adding $1 billion to its fee-paying assets and expanding its European presence. Analysts from firms such as Oppenheimer and JPMorgan inquired about the company’s strategic initiatives and market opportunities during the earnings call. P10 Inc anticipates double-digit revenue growth in 2025, driven by strategic initiatives and expanding market presence, as noted by company executives. The firm also announced a 7% increase in its quarterly dividend to $3.75 per share. Despite challenges, P10 Inc remains focused on executing its strategic plan and optimizing its organizational structure.

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