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On Wednesday, Keefe, Bruyette & Woods made adjustments to their financial model for Hamilton Lane Inc . (NASDAQ: NASDAQ:HLNE), leading to an increase in their price target from $158.00 to $168.00. The firm decided to maintain a Market Perform rating for the asset management company.
The adjustment followed Hamilton Lane’s recent financial performance, which displayed strong expense management. This fiscal discipline contributed to a Free Revenue (FRE) beat, with incentive fees and non-operating income exceeding expectations. InvestingPro data shows impressive revenue growth of 41.2% over the last twelve months, with a robust gross profit margin of 62.5%. As a result, Hamilton Lane’s shares performed better than those of its peers during the quarter, achieving a 28.7% return over the past six months.
Despite the positive outcome, Keefe, Bruyette & Woods analysts noted that market projections might not fully account for the company’s future equity-based compensation (EBC), which could present challenges to near-term estimates. The firm has subsequently increased its forward EBC estimate.
In their commentary, the analysts explained the rationale behind the revised price target, stating that although there were various factors to consider, the overall solid quarter justified a modest increase in the price target. The firm reiterated its Market Perform rating, indicating a neutral outlook on the stock’s potential performance relative to the market.
Investors responded positively to the news, with Hamilton Lane’s stock reflecting the market’s favorable reception to the company’s disciplined cost management and better-than-expected financial results. The updated price target suggests that Keefe, Bruyette & Woods sees some growth potential for Hamilton Lane, albeit with caution due to the anticipated impact of equity-based compensation on future earnings.
In other recent news, Hamilton Lane Inc. has been in the spotlight due to significant changes in its financial outlook. Goldman Sachs downgraded the company’s stock to Sell, citing slowing growth in management fees and increased competition, particularly in the Retail channel. The firm predicts Hamilton Lane’s management fee compound annual growth rate (CAGR) from 2024 to 2027 to be around 12%, compared to a historical 19%.
In addition, analysts from Keefe, Bruyette & Woods have adjusted their outlook on Hamilton Lane, reducing the price target for the company’s stock to $167.00. They have identified concerns such as the impact of equity-based compensation on financial estimates and slowing net flows as factors contributing to this revision.
On the earnings front, Hamilton Lane reported its fiscal second quarter results for 2025, emphasizing forward-looking statements and non-GAAP measures. However, specific details on financial performance were not disclosed in the summary. These are recent developments that investors should keep in mind when evaluating Hamilton Lane’s financial position and future prospects.
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