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On Monday, Oppenheimer adjusted its stock price target for P10 Inc (NYSE: NYSE:PX), a publicly traded private equity firm, increasing it to $13.00 from the previous target of $12.00. The firm maintained its Outperform rating on the stock.
The revised target is based on the firm's assessment of P10 Inc's distributable earnings and net debt position. Oppenheimer's analysis projected the 2025 fund management distributable earnings, including Earned Business Credit (EBC), to be $0.89 per share.
The earnings were taxed at 21%, and a 30% premium was applied to a 21.5x next twelve months (NTM) Price-to-Earnings (PE) ratio, resulting in an after-tax multiple value of $14.95 per share.
From this value, the firm subtracted $2.36 per share, representing P10 Inc's net debt, to arrive at the new fair value estimate of $13 per share. This methodology reflects a detailed valuation approach considering future earnings potential and the current financial structure of the company.
The Outperform rating suggests that Oppenheimer continues to view P10 Inc as a favorable investment compared to its peers, with expectations of the stock performing better than the broader market.
P10 Inc's adjusted price target and continued positive outlook from Oppenheimer may influence investor sentiment as the market processes this updated financial analysis.
In other recent news, P10 Holdings reported record Q1 revenues of $66.1 million, a 15% year-over-year increase, and a substantial rise in net income to $5 million, up from $800,000 in the previous year's first quarter. This growth is backed by an increase in assets under management (AUM), with the firm raising $670 million in fee-paying AUM. The company is also actively pursuing mergers and acquisitions.
In terms of future developments, P10 plans to maintain its growth trajectory, with strategies to raise and deploy over $2.5 billion of gross new assets throughout the year and to sustain double-digit revenue growth. The company's inaugural Investor Day is also slated for later this year.
It is worth noting that P10's CEO, Luke Sarsfield, expressed confidence in the mid-market's attractiveness despite macro pressures. Furthermore, the venture capital business, particularly the TrueBridge fund, is experiencing strong momentum, supported by the AI trend.
The company is also placing emphasis on execution and accountability as part of their strategy, while highlighting the increasing integration of data and AI in operations.
InvestingPro Insights
With Oppenheimer's recent price target adjustment for P10 Inc, investors may find additional context through InvestingPro data and tips. Notably, P10 Inc's market capitalization stands at $929.05 million, reflecting its place within the industry.
Despite a negative P/E ratio of -232.52, which indicates that the company has been unprofitable over the last twelve months, analysts are forecasting a turnaround with expectations of profitability this year. This aligns with the positive outlook from Oppenheimer, as the company's liquid assets also surpass its short-term obligations, suggesting financial stability.
Revenue growth remains robust with an 18.02% increase over the last twelve months as of Q1 2024, and a quarterly growth of 15.48% in Q1 2024. These figures suggest that P10 Inc is expanding its revenue streams effectively. Moreover, the company offers a dividend yield of 1.7%, which may appeal to income-focused investors, especially with a 16.67% growth in dividends over the last twelve months as of Q1 2024.
Investors seeking further analysis and insights can explore additional InvestingPro Tips, which include detailed earnings revisions and future growth projections. For those interested in a deeper dive, there are 2 more InvestingPro Tips available, which can be accessed through a subscription. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing a comprehensive toolkit for informed investment decisions.
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