On Friday, JPMorgan issued a downgrade for P10 Inc (NYSE: NYSE:PX), changing its stock rating from Overweight to Neutral and adjusting the price target to $9.50, a significant decrease from the previous $15.50 target. The revision comes as P10's new CEO, Luke Sarsfield, announces priorities focused on investing in personnel to institutionalize the business and to foster both organic and inorganic growth.
The downgrade was influenced by a slowdown in net sales for P10, which is now trailing behind its solution-based peers as we move through 2024. This slowdown prompted JPMorgan to revise its revenue estimates downwards. Additionally, the firm expects expenses to rise due to a mix of investments, which has further impacted the financial outlook for P10.
In a statement, JPMorgan highlighted the rationale behind the revised price target, citing "lower estimates and a somewhat lower valuation on the lower growth."
This adjustment reflects the firm's recalibrated expectations for P10's financial performance in the upcoming period.
The new price target of $9.50 set by JPMorgan is intended to mirror the anticipated challenges P10 may face in achieving growth targets, given the current pace of net sales and the expected increase in expenses. The investment bank's analysis suggests a more conservative valuation for P10 based on these updated projections.
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