On Monday, Stephens, a financial services firm, raised the price target for P10 Inc (NYSE:PX) to $13, increasing from the prior $12 target. The firm reiterated its Overweight rating on the company's stock. This adjustment follows P10 Inc's recent announcement of its third-quarter results for 2024, which marked the company's fourth consecutive quarter of surpassing expectations on both revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA).
P10 Inc reported a significant year-over-year revenue increase of 26%, outperforming estimates by approximately 11%. The company's EBITDA similarly exceeded forecasts by roughly 30%, thanks in part to the revenue outperformance and the inherent leverage characteristic of P10's business model. The reported EBITDA margin was 47.6%, significantly higher than the 40.7% anticipated by analysts.
Looking forward, Stephens anticipates a positive outlook for P10 Inc, highlighting the company's addition of $1.4 billion in gross new fee-paying assets under management (AUM). The total amount raised this year to date has already surpassed the original full-year target of $2.5 billion, reaching $2.9 billion. Additionally, P10's incremental margin catch-up fees have been performing better than expected and appear to have lasting potential.
The firm also suggests that mergers and acquisitions (M&A) activity may provide ongoing opportunities for P10 Inc. The maintained Overweight rating and the new price target of $13 reflect the firm's confidence in the company's continued strong performance and growth prospects.
In other recent news, P10, a global investment management firm, reported a record third quarter in 2024, with a 26% increase in total revenue, reaching $74 million, and a 19% rise in fee-related earnings to approximately $35 million. A significant part of P10's recent developments includes the successful implementation of its strategic growth plan, with $2.9 billion raised and deployed year-to-date, surpassing the full-year guidance. The firm also announced the acquisition of Qualitas Funds, a move expected to enhance P10's European presence and investor base, with the deal set to close in Q1 2025.
In addition, P10 aims to double its fee-paying assets under management by 2029, with a focus on organic growth and value-creating mergers and acquisitions. The company's fee-paying assets under management increased by 10% year-over-year to $24.9 billion. P10's management remains optimistic about future growth and margin expansion, targeting mid-40s to near 50% over the long term.
Lastly, the firm declared a quarterly cash dividend of $0.035 per share and bought back 609,300 shares at an average price of $10.15 in Q3, despite pausing share buybacks due to ongoing material transactions. These recent developments underscore P10's commitment to operational efficiencies and disciplined capital allocation strategy, indicating continued momentum into 2025 and beyond.
InvestingPro Insights
P10 Inc's recent performance aligns with several key metrics and insights from InvestingPro. The company's revenue growth of 25.96% in Q3 2024 supports Stephens' observation of a 26% year-over-year increase. This growth trend is further reinforced by an InvestingPro Tip indicating that net income is expected to grow this year.
The strong EBITDA performance noted in the article is reflected in P10's current EBITDA of $73.3 million for the last twelve months as of Q3 2024. Additionally, the company's profitability is highlighted by an InvestingPro Tip stating that P10 has been profitable over the last twelve months.
P10's market performance has been notably strong, with a 26.03% price total return over the last three months and a significant 43.91% return over the past six months. These figures align with the InvestingPro Tip mentioning a strong return over the last three months and a large price uptick over the last six months.
The new price target of $13 set by Stephens is close to the fair value of $13 based on analyst targets, as reported by InvestingPro. This target also aligns with the InvestingPro Tip indicating that P10 is trading near its 52-week high, currently at 98.23% of that level.
For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips for P10 Inc, providing a deeper understanding of the company's financial health and market position.
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