How Will Recent Private Markets Growth Shape GCM Grosvenor’s Valuation in 2025?

Thinking about what to do with GCM Grosvenor stock? You are not alone. Whether you are holding, buying, or considering taking your gains elsewhere, there is plenty to weigh here. GCM Grosvenor’s stock has had an interesting ride lately, giving investors both reasons for optimism and a few for caution.

This past week, shares dipped slightly by 0.7%. Looking at the last 30 days, the slide has been a steeper 6.2%. Year-to-date, the price is down 4.1%. From a one-year perspective, things look brighter, with a 9.1% gain. Long-term holders may be even more encouraged, as the stock is up 83.4% over the last three years and 41.8% in the last five. This kind of performance suggests sustained growth potential, and recent market developments in the alternative investments sector could be helping to keep sentiment positive, even during periodic dips.

If you were hoping the company’s value score would confirm a strong buy, you might need to hold that thought. Based on a framework that gives a point for each undervalued metric, GCM Grosvenor scores a 1 out of 6. The company appears cheap by just one measure, which is not a definitive signal, but not necessarily negative either.

Of course, valuation is in the eye of the beholder, and the methods can be as varied as investors themselves. Next, let’s break down exactly how those checks are scored, and later, I will share a perspective that goes beyond the standard valuation playbook.

GCM Grosvenor scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: GCM Grosvenor Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a valuation method that estimates a company's intrinsic value by projecting its future cash flows and discounting them back to today's dollars. It aims to determine what GCM Grosvenor is truly worth, based on how much cash it is expected to generate in the years ahead.

For GCM Grosvenor, the current Free Cash Flow (FCF) stands at $173.8 million. Analyst estimates give a projected FCF of $16 million for 2026, with subsequent years extrapolated based on trends and assumptions. Over the next decade, projections indicate that free cash flow will gradually decrease before stabilizing, as seen in the forecasts provided. Simply Wall St notes that after 2026, estimates are extrapolated since analysts typically only forecast up to five years ahead.

After crunching these numbers, the DCF model calculates an estimated intrinsic value of $0.42 per share for GCM Grosvenor. When compared to the actual share price, this represents a 2,761.1% premium, meaning the market price is much higher than what the DCF analysis suggests is fair value.

If you rely solely on this model, GCM Grosvenor appears significantly overvalued at current levels.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for GCM Grosvenor.

Our Discounted Cash Flow (DCF) analysis suggests GCM Grosvenor may be overvalued by 2761.1%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: GCM Grosvenor Price vs Earnings

The price-to-earnings (PE) ratio is often the go-to valuation metric for profitable companies like GCM Grosvenor. It tells investors how much they are paying for each dollar of earnings, which makes it a useful tool for assessing whether a stock is reasonably priced, especially when earnings are stable and consistently positive.

It is important to remember that growth expectations and company risk have a big influence on what makes for a “normal” or “fair” PE ratio. Fast-growing or less risky companies can justify higher PE ratios. In contrast, slower growers or those with greater uncertainties generally trade at lower ones.

For GCM Grosvenor, the current PE ratio sits at 23x. Comparing this to the industry average of 27.07x and the peer average of 16.46x shows that the stock is trading below its broader industry but higher than its direct competitors. However, peers and industry averages do not always capture company-specific factors that truly determine fair value.

This is where Simply Wall St’s “Fair Ratio” comes in. The Fair Ratio is calculated using a range of tailored inputs including a company’s growth prospects, profit margins, inherent risks, and even market cap size. This goes well beyond a simple apples-to-apples comparison with industry or peer numbers. For GCM Grosvenor, the Fair Ratio is set at 12.49x.

Compared to its current PE of 23x, GCM Grosvenor is trading at a noticeably higher valuation than the Fair Ratio suggests. This points to the stock being overvalued based on this approach.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your GCM Grosvenor Narrative

Earlier we mentioned there is an even better way to understand valuation, so let's introduce you to Narratives, an approach that empowers you to tell your own story about a company while connecting it to the numbers behind fair value, future revenue, and earnings projections.

A Narrative is simply your perspective or thesis about a business, backed up by your own expectations for its future. Think of it as the story you believe about GCM Grosvenor’s strengths, risks, and opportunities, woven into a financial forecast that leads to your estimated fair value for the stock.

On Simply Wall St’s Community page, Narratives allow millions of investors to easily build, update, and share their outlook, all while seeing how new events, earnings reports, or news headlines shift the numbers and the story.

This makes it easy to spot when the current price offers an opportunity or a warning by directly comparing your narrative-based fair value to the market price, so you can decide when to buy, hold, or sell with clarity and confidence.

For example, some investors’ Narratives for GCM Grosvenor expect innovative technology and alternative asset growth to lift profitability and set a value as high as $20 per share. Others, concerned about fee pressure or client concentration, set their own fair value closer to $12.5, showing that there is no single “right” answer, just the one that fits your story and expectations.

Do you think there's more to the story for GCM Grosvenor? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com