On Friday, Keefe, Bruyette & Woods adjusted its stance on P10 Inc (NYSE: NYSE:PX), downgrading the stock to Market Perform from Outperform and setting a new price target of $10.00, lowered from the previous $12.00. The firm's reassessment comes as investor concerns regarding P10's former co-CEOs have diminished, allowing a refocused analysis on the company's fundamental performance.
The revised outlook for P10 Inc is based on the company's 2024 guidance, which suggests a weaker performance than Keefe, Bruyette & Woods originally expected. The firm noted that P10 is guiding to an adjusted EBITDA margin in the mid-40s percentile, a decline from the 51% achieved in 2023. Moreover, the company anticipates less fundraising activity despite an increase in the number of funds available in the market this year.
Keefe, Bruyette & Woods projects a significant slowdown in P10's EBITDA growth, estimating a mere 2.7% increase, which is a sharp drop from the previously expected growth rate of over 14%. The analyst firm sees 2024 as a transitional year for P10 Inc and anticipates the stock to remain range-bound until there is a clear change in the company's growth or margin profile.
The downgraded rating reflects the analyst's belief that the current conditions warrant a Market Perform rating for P10's shares. It suggests that the firm expects the stock to perform in line with the broader market until P10 demonstrates a potential improvement in its financial metrics.
InvestingPro Insights
As P10 Inc (NYSE: PX) faces a transitional period, with Keefe, Bruyette & Woods adjusting their outlook, it's essential to consider various financial metrics and analyst predictions to gain a comprehensive view of the company's potential. According to InvestingPro data, P10 Inc has a market capitalization of $1.08 billion and is showing a promising revenue growth of 27.67% over the last twelve months as of Q3 2023. This growth is coupled with a robust gross profit margin of 59.77%, reflecting the company's ability to maintain profitability on its sales.
InvestingPro Tips suggest that while P10 Inc was not profitable over the last twelve months, analysts are predicting the company will reach profitability this year. This forecast aligns with the company's recent guidance and could signal a turnaround in its financial performance. However, it's noteworthy that three analysts have revised their earnings expectations downwards for the upcoming period, indicating potential challenges ahead.
For investors seeking more detailed analysis and additional InvestingPro Tips, there are more insights available specifically for P10 Inc at https://www.investing.com/pro/PX. Utilize the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to a wealth of financial data and expert analysis to inform your investment decisions.
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