Hamilton Lane (HLNE) AI Stock Analysis

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Hamilton Lane

(NASDAQ:HLNE)

78Outperform

Hamilton Lane is a strong performer with excellent financial health and cash flow management. While the stock shows some technical strength, the high valuation and challenges highlighted in the earnings call, such as rising expenses, need consideration. The overall score reflects a well-positioned company with potential growth but some caution due to valuation and market challenges.

Positive Factors

Growth Profile

HLNE demonstrates substantial strength with a strong growth profile from the firm’s evergreen platform in the vast retail market.

Private Markets Exposure

The broad-based nature of HLNE's private markets exposure is considered the stock's main attribute.

Negative Factors

Valuation Concerns

HLNE's current high P/E ratios and YTD stock price strength keep analysts cautious.

Hamilton Lane (HLNE) vs. S&P 500 (SPY)

Market Cap

$9.83B

Dividend Yield1.13%

Average Volume (3M)524.33K

Price to Earnings (P/E)32.2

Beta (1Y)1.24

Revenue Growth41.16%

EPS Growth64.13%

CountryUS

Employees700

SectorFinancial

Sector Strength84

IndustryAsset Management

Share Statistics

EPS (TTM)1.25

Shares Outstanding43,337,230

10 Day Avg. Volume354,688

30 Day Avg. Volume524,325

Financial Highlights & Ratios

PEG Ratio1.70

Price to Book (P/B)9.95

Price to Sales (P/S)0.00

P/FCF Ratio33.60

Enterprise Value/Market Cap0.95

Enterprise Value/Revenue3.70

Enterprise Value/Gross Profit20.08

Enterprise Value/Ebitda7.68

Forecast

1Y Price Target

$157.00

Price Target Upside-7.48% Downside

Rating ConsensusHold

Number of Analyst Covering4

Hamilton Lane Business Overview & Revenue Model

Company DescriptionHamilton Lane (HLNE) is a leading global private markets investment management firm headquartered in Bala Cynwyd, Pennsylvania. Specializing in private markets, Hamilton Lane offers a range of services including investment management, advisory services, and reporting services to its clients, which include institutional investors such as public pension plans, sovereign wealth funds, endowments, foundations, and family offices. The company is known for its comprehensive approach to private markets investing, leveraging a combination of a global network and deep industry expertise to deliver innovative solutions tailored to clients' needs.

How the Company Makes MoneyHamilton Lane primarily makes money through management and advisory fees. The company earns management fees based on a percentage of the assets under management (AUM) for its investment management services. These fees are typically recurring and provide a stable revenue stream. In addition to management fees, Hamilton Lane generates revenue from performance fees, which are contingent upon achieving certain investment return benchmarks. The firm also earns advisory and reporting fees by providing customized advisory services and reporting solutions to its clients. Strategic partnerships and collaborations with other financial institutions can enhance revenue potential and expand service offerings, though specific partnerships are not detailed.

Hamilton Lane Financial Statement Overview

Summary

Hamilton Lane demonstrates strong financial performance with impressive margins and growth rates. The company shows robust cash flow management, though increasing debt trends need monitoring. Overall, the company maintains a stable financial position with effective operational efficiency.

Income Statement

Very Positive

Hamilton Lane demonstrates strong financial performance with a high gross profit margin of 67.1% and a net profit margin of 31.1% in TTM. The company recorded a remarkable revenue growth rate of 24.8% from the previous year, indicating positive growth trajectory. EBIT and EBITDA margins are healthy at 49.3% and 51.6% respectively, showcasing efficient operational management. However, the net income decreased from 2022 to TTM, which could be a concern for sustained profitability.

Balance Sheet

Positive

The company maintains a solid balance sheet with a debt-to-equity ratio of 0.57, suggesting moderate leverage. Return on Equity (ROE) is impressive at 33.2% in TTM, reflecting effective use of shareholder equity. The equity ratio stands at 40.8%, indicating a stable financial position. While the leverage is managed well, the increase in total debt over the years could present future risks if not controlled.

Cash Flow

Very Positive

Hamilton Lane exhibits robust cash flow management with a strong operating cash flow to net income ratio of 1.32, and free cash flow to net income ratio of 1.31 in TTM. The free cash flow growth rate is a notable 156.5%, demonstrating excellent cash conversion and financial health. These metrics highlight the company's ability to generate cash efficiently, providing a buffer for investments and operations.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
691.66M	553.84M	528.75M	367.92M	341.63M	274.05M
	Gross Profit
464.11M	352.35M	340.29M	246.16M	205.32M	175.53M
	EBIT
340.75M	248.95M	251.23M	318.31M	195.25M	143.56M
	EBITDA
356.79M	301.02M	247.48M	323.81M	199.38M	119.72M
	Net Income Common Stockholders
215.28M	140.86M	187.19M	247.25M	168.78M	126.78M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
321.45M	114.63M	111.75M	72.17M	87.34M	50.12M
	Total Assets
1.59B	1.27B	1.14B	1.29B	1.14B	473.53M
	Total Debt
369.87M	275.19M	292.35M	253.57M	238.46M	84.71M
	Net Debt
48.41M	160.56M	180.60M	181.40M	151.12M	34.58M
	Total Liabilities
729.00M	595.24M	566.35M	557.46M	546.32M	236.13M
	Stockholders Equity
649.26M	525.15M	415.44M	346.88M	238.13M	154.79M
Cash Flow		Free Cash Flow
276.01M	109.78M	221.84M	161.00M	168.52M	110.22M
	Operating Cash Flow
283.25M	120.85M	226.59M	169.52M	188.16M	116.37M
	Investing Cash Flow
-96.14M	-122.18M	177.91M	-70.49M	-421.78M	-49.90M
	Financing Cash Flow
29.66M	4.40M	-364.15M	-113.22M	270.66M	-64.71M

Hamilton Lane Technical Analysis

Technical Analysis Sentiment

Positive

Last Price169.70

Price Trends

50DMA

149.98

Positive

100DMA

151.63

Positive

200DMA

159.06

Positive

Market Momentum

MACD

7.31

Negative

RSI

66.52

Neutral

STOCH

75.65

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLNE, the sentiment is Positive. The current price of 169.7 is above the 20-day moving average (MA) of 159.61, above the 50-day MA of 149.98, and above the 200-day MA of 159.06, indicating a bullish trend. The MACD of 7.31 indicates Negative momentum. The RSI at 66.52 is Neutral, neither overbought nor oversold. The STOCH value of 75.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HLNE.

Hamilton Lane Risk Analysis

Hamilton Lane disclosed 58 risk factors in its most recent earnings report. Hamilton Lane reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Hamilton Lane Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLNE	78 Outperform	$9.83B	32.25	38.54%	1.13%	41.16%	64.13%
TRIN	73 Outperform	$959.42M	6.77	17.56%	13.62%	46.14%	34.91%
CG	70 Outperform	$17.30B	16.02	20.38%	2.92%	62.87%	―
BRDG	66 Neutral	$2.68B	72.24	-22.41%	4.57%	-1.09%	-120.06%
Sector *	64 Neutral	$12.82B	9.87	7.67%	17000.34%	12.39%	-5.85%
GCMG	63 Neutral	$2.44B	92.49	-12.68%	3.50%	17.33%	1.83%
STEP	63 Neutral	$6.89B	103.13	-26.81%	1.57%	118.79%	-285.61%

* Financial Sector Average

Performance Comparison

HLNE

Hamilton Lane

169.70

51.95

44.12%

Carlyle Group

46.71

3.61

8.38%

GCMG

GCM Grosvenor

12.53

2.85

29.44%

STEP

StepStone Group

58.43

22.00

60.39%

TRIN

Trinity Capital

14.95

2.01

15.53%

BRDG

Bridge Investment Group

9.83

2.39

32.12%

Hamilton Lane Earnings Call Summary

Earnings Call Date:Feb 04, 2025

(Q3-2025)

% Change Since: 7.79%|

Next Earnings Date:May 29, 2025

Earnings Call Sentiment Neutral

The earnings call presented strong growth in revenue and assets under management, coupled with recognition for the firm's culture. Despite these positive aspects, there are notable challenges, including increased expenses related to equity-based compensation and high third-party commission expenses. Potential future fee compression in the Evergreen space was also highlighted as a concern.

Q3-2025 Updates

Positive Updates

Significant Growth in Management and Advisory Fee Revenue

Management and advisory fee revenue grew by 18%, while fee-related earnings grew by 21% compared to the prior year.

Expansion in Assets Under Management

Total asset footprint increased to $956 billion, a 6% increase year-over-year, with AUM standing at $135 billion, up by 12%.

Strong Performance in Specialized Funds

Specialized funds revenue increased by 28%, with a notable $3.8 billion increase in fee-earning AUM within the Evergreen platform.

Recognition of Company Culture

Hamilton Lane was recognized as a Best Place to Work in Money Management for the 13th consecutive year.

Record Incentive Fees

Incentive fees totaled $129 million, up 163% relative to the prior year period, driven by strong performance in secondary funds.

Negative Updates

Impact of Equity-Based Compensation on Expenses

Total expenses increased by $67.2 million, driven primarily by higher compensation associated with increased headcount and equity-based compensation.

Potential Fee Compression Concerns

While current fees remain robust, there is an expectation of potential fee compression in the Evergreen space over time.

High Third-Party Commission Expenses

Revenue-related expenses, including third-party commissions related to U.S. Evergreen products, have increased, impacting margin stability.

Company Guidance

During the Hamilton Lane Fiscal Third Quarter 2025 earnings call, the company provided guidance and highlighted key metrics. Year-to-date through the third quarter, management and advisory fee revenue increased by 18%, and fee-related earnings grew by 21% compared to the previous year. The company reported a GAAP EPS of $4.15, based on $167 million of GAAP net income, and a non-GAAP EPS of $3.82, based on $208 million of adjusted net income. Hamilton Lane declared a dividend of $0.49 per share for the quarter, aligning with a targeted 10% increase over the last fiscal year, totaling $1.96 per share for fiscal year 2025. The total asset footprint increased by 6% year-over-year to $956 billion, with AUM reaching $135 billion, a 12% growth. Fee-earning AUM rose to approximately $71 billion, a 13% increase, driven by specialized fund platforms and customized separate accounts. The company continues to benefit from a blended fee rate that has increased to over 60 basis points, excluding retro fees.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.