Hamilton Lane (HLNE): Analyzing Valuation After Shares Drop 21% in the Past Month

Hamilton Lane (HLNE) stock has faced a steady decline over the past month, with shares down 21%. Investors are watching closely to see how the company responds and whether fundamentals can support a rebound from these recent losses.

See our latest analysis for Hamilton Lane.

After a tough month and a 21% drop, Hamilton Lane's share price sits at $118.26. Its 1-year total shareholder return is now down 31%. While recent momentum has faded, the longer-term track record still shows a 115% total return over three years. This reminds investors that sentiment can shift quickly in this market.

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With shares sitting near recent lows and trading well below analyst price targets, investors must now ask if Hamilton Lane is looking undervalued or if the market has already factored in the company’s growth prospects.

Most Popular Narrative: 25.6% Undervalued

Hamilton Lane's most widely followed narrative assigns a fair value that is substantially higher than the recent closing price of $118.26. This suggests analysts see further room for upside. Here is what underpins this optimism and sets the stage for a deeper look into the assumptions behind it.

Rapid net inflows, especially in the Evergreen platform (65% year-over-year AUM growth and record $1.2 billion quarterly net inflows), along with growing global partnerships and new client wins, indicate a continually expanding addressable market and sustained topline revenue growth.

Read the complete narrative.

Want to know the secret sauce behind this bullish valuation? The narrative centers on ambitious earnings growth and profit margins usually seen at blue-chip firms. Which bold financial forecasts could propel Hamilton Lane to this fair value? Explore the full narrative for the numbers that drive this compelling outlook.

Result: Fair Value of $159 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing regulatory pressures and increased industry competition could slow asset growth and squeeze margins. These factors may potentially challenge the bullish narrative underpinning Hamilton Lane's outlook.

Find out about the key risks to this Hamilton Lane narrative.

Another View: Market Multiples Paint a Different Picture

Looking through the lens of the price-to-earnings ratio, Hamilton Lane trades at 24.5x earnings. This is below the US Capital Markets industry average of 25.6x but well above the fair ratio of 18.8x and the peer average of 12.8x. While the market says value, the real opportunity or risk may lie in whether sentiment drifts toward the fair ratio. Could this premium suggest hidden strength, or just set up for a reversion?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Hamilton Lane for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Hamilton Lane Narrative

If you have a different perspective or want to dive into the numbers on your own, you can easily build a customized Hamilton Lane story in just a few minutes. Start with Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Hamilton Lane.

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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.

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