On Wednesday, Truist Securities revised its price target for DigitalBridge Group Inc. (NYSE:DBRG) to $19.00, down from the previous target of $22.00. Despite this change, the firm maintains a Buy rating on the company's stock.
The adjustment follows DigitalBridge's recent investor day, where the company outlined its strategy to double its fee-earning equity under management (FEEUM) within the next five years. DigitalBridge's approach includes focusing on the top 100 infrastructure investors that are currently underallocated and leveraging the increasing interest in digital assets. The company also plans to gain market share through fund performance.
To achieve these goals, DigitalBridge intends to expand its sales team to better reach the top 1,000 institutional investors and private wealth/family offices. Truist Securities acknowledges that while it may take time for DigitalBridge to fully benefit from the institutionalization of its fundraising team, the firm believes DigitalBridge is in a strong position to outperform other general partners (GPs) in the digital infrastructure sector, which is experiencing high growth.
DigitalBridge's emphasis on becoming a leading scaled specialist in the digital infrastructure space is seen as a key differentiator that could drive its success. The company's strategies are aimed at capitalizing on the opportunities within the rapidly evolving digital asset landscape.
As DigitalBridge works towards expanding its market presence and refining its fundraising capabilities, the lowered price target reflects a cautious optimism about the company's ability to execute its ambitious growth plan. The Buy rating suggests that Truist Securities still sees potential in DigitalBridge's stock despite the near-term challenges the company may face in realizing its objectives.
InvestingPro Insights
In light of Truist Securities' revised price target for DigitalBridge Group Inc. (NYSE:DBRG), real-time data from InvestingPro offers further context for investors. With a market capitalization of $2.63 billion, DigitalBridge is trading at a price-to-earnings (P/E) ratio of 7.76, indicating a potentially undervalued stock compared to the broader market. Additionally, the company's revenue has seen a significant increase, with growth of 82.22% over the last twelve months as of Q1 2023. Despite recent price declines, with a 22.39% drop over the last month and a 31.3% decrease over the last three months, InvestingPro Tips highlight that DigitalBridge is trading at a low earnings multiple and a low EBITDA valuation multiple, which could attract value investors.
Moreover, analysts predict the company will be profitable this year, with a basic EPS (Continuing Operations) of $3.22. The strong revenue growth coupled with profitability forecasts may reassure investors about the company's ability to execute its ambitious growth plan. For those looking to delve deeper into DigitalBridge's potential, InvestingPro offers additional tips. There are currently 14 more InvestingPro Tips available, which can provide a more comprehensive analysis of the company's financial health and market position.
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