Morgan Stanley has maintained its Equalweight rating on shares of Hamilton Lane Inc . (NASDAQ: NASDAQ:HLNE) and increased the price target to $140 from $132.
Following the company's second-quarter 2024 earnings, the firm has adjusted its earnings per share (EPS) estimates for the upcoming years. The CY24e EPS forecast has been raised by 5.6% to $4.82, up from the previous $4.56 estimate. Conversely, the CY25e EPS prediction has been slightly reduced by 0.5% to $5.01 from $5.03.
The adjustment to Hamilton Lane's price target reflects a change in the price-to-earnings (P/E) multiple, which Morgan Stanley now sets at 28 times. The increase in the multiple has contributed to the higher price target for the asset management firm.
Additionally, the analyst has revised the third quarter 2024 EPS estimate downwards by 5% to $1.04 from the former forecast of $1.09.
The updated figures from Morgan Stanley come after a detailed review of Hamilton Lane's recent earnings performance. The firm's decision to adjust the EPS estimates for the current and following year indicates a nuanced view of the company's financial trajectory. The slight decrease in the CY25e EPS estimate suggests a conservative stance for Hamilton Lane's growth in the medium term.
Hamilton Lane has unveiled its fiscal year 2024 results, marking a significant 22% growth in management and advisory fee revenue compared to the previous year. The company reported a GAAP EPS of $3.69 and a non-GAAP EPS of $3.92, demonstrating a robust financial performance. Hamilton Lane also declared a 10% increase in its annual fiscal dividend to $1.96 per share and noted a 7% increase in its total asset footprint to $921 billion.
The company has made strategic investments in technology and partnerships and launched a specialized venture capital fund. The firm's total asset footprint has expanded to $921 billion, with fee-earning AUM growing by 15% to $65.7 billion. Despite increased expenses due to headcount growth and revenue-related expenses, the company aims for strong double-digit growth while managing expenses.
InvestingPro Insights
Hamilton Lane Inc. (NASDAQ:HLNE) has demonstrated a robust financial performance with a notable 20.69% revenue growth and a strong 44.84% operating income margin over the last twelve months as of Q1 2023. The company's commitment to shareholder value is evident through its consistent dividend growth, having raised its dividend for 7 consecutive years. This dedication to returning capital to shareholders is complemented by a dividend yield of 1.44% as of 2024.
An InvestingPro Tip highlights that Hamilton Lane is trading at a P/E ratio of 30.91, which is considered low relative to its near-term earnings growth, suggesting potential for increased investor interest. Additionally, with a Price / Book ratio of 13.15, the firm is trading at a premium, which could reflect the market's confidence in its assets and future growth prospects. Investors may also find reassurance in the fact that Hamilton Lane's liquid assets exceed its short-term obligations, indicating a solid liquidity position.
For those looking to delve deeper into Hamilton Lane's financials and performance metrics, InvestingPro offers additional insights and tips. Currently, there are 11 more InvestingPro Tips available that could help investors make more informed decisions about their investments in Hamilton Lane.
As Hamilton Lane Inc. approaches its next earnings date on October 29, 2024, market participants will be closely watching to see if the company can sustain its positive trajectory and meet the expectations set forth by analysts and its own historical performance.
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