Piper Sandler (PIPR) AI Stock Analysis

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Piper Sandler

(NYSE:PIPR)

Rating:71Outperform

Price Target:―

Piper Sandler's overall score reflects strong financial performance, particularly in revenue growth and profitability, balanced by technical analysis signals and valuation concerns. While the earnings call indicated growth in investment banking, market volatility and anticipated declines in advisory services prompt a cautious outlook.

Positive Factors

Business Strategy

The firm has heavily invested in talent to expand its platform, particularly in the Advisory business, which is expected to drive incremental growth.

Financial Performance

Piper Sandler delivered a strong quarter with adjusted revenues significantly above estimates, indicating strong company performance.

Negative Factors

Market Volatility

Timely investor meetings with Piper Sandler management address recent market volatility, adding some near-term uncertainty.

Piper Sandler (PIPR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$4.66B

Dividend Yield0.97%

Average Volume (3M)166.58K

Price to Earnings (P/E)23.0

Beta (1Y)1.42

Revenue Growth12.29%

EPS Growth99.57%

CountryUS

Employees1,801

SectorFinancial

Sector Strength81

IndustryFinancial - Capital Markets

Share Statistics

EPS (TTM)4.09

Shares Outstanding17,756,739

10 Day Avg. Volume154,415

30 Day Avg. Volume166,580

Financial Highlights & Ratios

PEG Ratio1.81

Price to Book (P/B)3.68

Price to Sales (P/S)0.00

P/FCF Ratio15.01

Enterprise Value/Market Cap0.88

Enterprise Value/Revenue0.70

Enterprise Value/Gross Profit3.53

Enterprise Value/Ebitda4.72

Forecast

1Y Price Target

$330.00

Price Target Upside31.34% Upside

Rating ConsensusHold

Number of Analyst Covering1

Piper Sandler Business Overview & Revenue Model

Company DescriptionPiper Sandler Companies (PIPR) is a leading investment bank and institutional securities firm offering a wide range of financial services. Headquartered in Minneapolis, Minnesota, the company operates in sectors such as healthcare, financial institutions, energy, consumer, and retail, among others. Piper Sandler provides services including investment banking, public finance, institutional brokerage, and asset management, catering to corporations, private equity firms, government entities, and institutional investors.

How the Company Makes MoneyPiper Sandler makes money primarily through its investment banking and institutional securities operations. The company's revenue streams include advisory fees from mergers and acquisitions, underwriting fees from debt and equity offerings, and trading commissions from securities transactions. Additionally, Piper Sandler generates revenue from asset management fees, which are based on the assets under management (AUM) and performance of the investment funds. The company's earnings are also influenced by market conditions and economic trends, as well as its strategic partnerships and client relationships in various industries.

Piper Sandler Financial Statement Overview

Summary

Piper Sandler exhibits robust financial performance with strong revenue growth and profitability. The income statement shows a 13.6% increase in revenue, though a decrease in gross profit is noted. The balance sheet is strong with no debt and solid equity. Cash flow is positive, but the high free cash flow to net income ratio warrants attention.

Income Statement

Positive

Piper Sandler has demonstrated a strong income statement performance with a notable increase in revenue from $1.35 billion in 2023 to $1.53 billion in 2024, reflecting a revenue growth rate of approximately 13.6%. The gross profit margin in 2024 was approximately 34.4%, while the net profit margin was around 11.8%. The EBIT and EBITDA margins were both approximately 31.7%. These margins indicate robust profitability, although the decrease in gross profit from 2023 is a point of concern.

Balance Sheet

Positive

The balance sheet reveals a strong financial position with no total debt as of 2024, significantly improving from the prior year. The debt-to-equity ratio is 0, indicating no leverage, while the equity ratio stands at 54.4%, showing a solid equity base. Return on equity (ROE) is approximately 14.8%, which is healthy for the industry, reflecting efficient use of equity to generate profit.

Cash Flow

Positive

Piper Sandler's cash flow statement shows a positive trajectory, with free cash flow growing from $265.58 million in 2023 to $297.76 million in 2024, translating to a growth rate of approximately 12.1%. The operating cash flow to net income ratio is 1.73, indicating strong cash generation relative to net profits. However, the free cash flow to net income ratio is a high 1.64, suggesting the company is generating significant free cash flow relative to net income.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.53B	1.35B	1.37B	1.97B	1.18B
	Gross Profit
527.42M	1.21B	307.79M	587.17M	220.24M
	EBIT
485.18M	312.55M	168.98M	389.66M	59.70M
	EBITDA
251.16M	0.00	326.48M	330.37M	0.00
	Net Income Common Stockholders
181.11M	85.49M	110.67M	278.51M	40.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
482.83M	383.10M	365.62M	970.97M	507.94M
	Total Assets
2.26B	2.14B	2.18B	2.57B	2.00B
	Total Debt
98.82M	164.16M	234.77M	214.63M	294.48M
	Net Debt
-384.01M	-218.93M	-130.85M	-756.34M	-213.46M
	Total Liabilities
840.16M	841.51M	927.53M	1.34B	1.07B
	Stockholders Equity
1.23B	1.09B	1.05B	1.06B	829.42M
Cash Flow		Free Cash Flow
297.76M	265.58M	-255.51M	686.51M	762.18M
	Operating Cash Flow
313.25M	275.63M	-224.91M	707.09M	779.76M
	Investing Cash Flow
-31.77M	-10.05M	-127.10M	-20.58M	-435.00M
	Financing Cash Flow
-180.61M	-249.59M	-250.06M	-223.12M	-87.56M

Piper Sandler Technical Analysis

Technical Analysis Sentiment

Negative

Last Price251.25

Price Trends

50DMA

245.60

Positive

100DMA

268.51

Negative

200DMA

279.41

Negative

Market Momentum

MACD

4.88

Positive

RSI

49.34

Neutral

STOCH

23.43

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PIPR, the sentiment is Negative. The current price of 251.25 is below the 20-day moving average (MA) of 253.40, above the 50-day MA of 245.60, and below the 200-day MA of 279.41, indicating a neutral trend. The MACD of 4.88 indicates Positive momentum. The RSI at 49.34 is Neutral, neither overbought nor oversold. The STOCH value of 23.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PIPR.

Piper Sandler Risk Analysis

Piper Sandler disclosed 32 risk factors in its most recent earnings report. Piper Sandler 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

Piper Sandler Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EVR	77 Outperform	$9.14B	22.65	29.73%	1.43%	26.88%	68.65%
PJT	75 Outperform	$5.16B	26.02	96.33%	0.68%	16.04%	60.32%
PIPR	71 Outperform	$4.66B	22.95	17.59%	0.97%	12.29%	99.57%
SNEX	71 Outperform	$4.31B	14.62	16.69%	―	67.71%	19.42%
LAZ	71 Outperform	$4.24B	15.70	59.68%	4.44%	9.54%	―
MC	68 Neutral	$4.86B	27.56	39.98%	4.32%	45.14%	―
Sector *	64 Neutral	$12.66B	9.79	7.67%	17015.07%	12.23%	-6.06%

* Financial Sector Average

Performance Comparison

PIPR

Piper Sandler

251.25

45.13

21.90%

EVR

Evercore Partners

225.52

28.06

14.21%

SNEX

StoneX Group

84.96

35.36

71.29%

LAZ

Lazard

43.15

4.17

10.70%

Moelis

56.57

2.10

3.86%

PJT

PJT Partners

147.83

43.71

41.98%

Piper Sandler Earnings Call Summary

Earnings Call Date:May 02, 2025

(Q1-2025)

% Change Since: 3.48%|

Next Earnings Date:Jul 25, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a mix of positive growth in specific segments such as investment banking and public finance, but also highlighted challenges in corporate financing and market volatility affecting future outlooks. Despite growth in some areas, uncertainties and anticipated declines in advisory revenues signal a cautious sentiment.

Q1-2025 Updates

Positive Updates

Strong Start to 2025

Adjusted net revenues of $383 million, a 17.9% operating margin, and adjusted EPS of $4.09, all up compared to the same period last year.

Increase in Corporate Investment Banking Revenues

Corporate investment banking revenues totaled $253 million, reflecting a 20% increase year-over-year, with advisory services revenues increasing by 38%.

Public Finance Business Growth

Municipal financing revenues grew by 27% year-over-year, outpacing the market issuance growth in par value of 15%.

Equity Brokerage Revenue Increase

Equity brokerage generated $54 million in revenues for the first quarter of 2025, up 10% year-over-year.

Fixed Income Revenue Growth

Fixed income revenues increased by 7% from the year-ago quarter driven by solid activity across most client verticals.

Increase in Managing Directors

The firm finished the quarter with 182 managing directors, a 6% increase from a year ago, highlighting expansion efforts.

Negative Updates

Challenged Corporate Financing Activity

Corporate financing revenues were down 32% from the year-ago period, with a weakened market environment for equity underwriting.

Anticipated Decline in Advisory Revenues

Second quarter advisory revenues are expected to decline from the first quarter levels due to heightened market volatility.

Uncertainty and Volatility

Heightened volatility in equity and debt markets and continued uncertainty are impacting client engagement and market activity.

Challenges in Consumer and Energy Sectors

Consumer goods, especially those sourced in China, and energy sectors are facing challenges due to market conditions.

Company Guidance

During the Piper Sandler Companies First Quarter 2025 Earnings Conference Call, management outlined several key metrics and provided guidance amidst a challenging market environment. The company reported adjusted net revenues of $383 million, a 17.9% operating margin, and an adjusted EPS of $4.09, all showing growth compared to the previous year. The corporate investment banking division saw a 20% year-over-year increase in revenues to $253 million, with advisory services contributing $217 million, a 38% rise from last year. Despite current market volatility, Piper Sandler remains optimistic due to its diversified sector coverage and product capabilities. However, they anticipate a slowdown in M&A deal cycles and a decline in second-quarter advisory revenues. The public finance segment reported $26 million in municipal financing revenues, a 27% increase year-over-year. The brokerage businesses also showed growth, with equity brokerage revenues up 10% and fixed income revenues up 7% from the previous year. The company finished the quarter with 182 managing directors, reflecting a 6% increase from last year, highlighting strategic hires and expansion into sectors like infrastructure and healthcare investment banking. Piper Sandler remains committed to driving shareholder returns, having repurchased 266,000 shares for $81 million and paid $70 million in dividends.

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.