Hamilton Lane (HLNE): Evaluating Valuation as $5B Guardian Partnership Expands Assets and Insurance Channel

Hamilton Lane (HLNE) announced a far-reaching partnership with Guardian Life that will put it in charge of Guardian's $5 billion private equity portfolio, including a decade-long annual $500 million commitment. The agreement brings new assets, collaborative initiatives, and fresh talent into Hamilton Lane’s expanding insurance business.

See our latest analysis for Hamilton Lane.

Despite securing this major partnership and recently expanding its private market indices to the Bloomberg Terminal, Hamilton Lane’s share price has faced notable challenges. With a 1-year total shareholder return down 34.8% and the share price sliding nearly 10% over the past month, momentum has softened even as long-term total returns remain impressive. Investors are recalibrating after such a strong multi-year run, which is setting the stage for new strategic growth drivers to take the focus.

If this shift in the private equity space has you thinking bigger, now is the perfect moment to broaden your search and discover fast growing stocks with high insider ownership

With shares trading sharply below analyst targets and following a steep pullback, is Hamilton Lane currently undervalued, or are markets fully accounting for its growth prospects and insurance expansion? Could there be a real buying opportunity here?

Most Popular Narrative: 26.9% Undervalued

With the narrative’s fair value set at $157.17, Hamilton Lane's last close of $114.93 suggests significant room for upside if current assumptions hold true. The following quote highlights how new fund launches and fee-earning momentum could become pivotal elements in the company’s financial story.

Strong momentum in Hamilton Lane's evergreen and specialized fund products, including recent launches in infrastructure, multi-strategy, and Asia-focused vehicles, reflects expanding demand from both institutional and retail clients seeking alternatives to traditional markets. This supports accelerating fee-earning AUM growth and increasing fee-related revenues.

Read the complete narrative.

Ready for the engine behind this bold valuation? Analysts see a combination of surging fee revenue, ambitious growth trajectories, and margin expansion. But what exactly are the assumptions about future profitability driving this price? Find out which financial forecasts set this target apart and whether the market is set to catch up.

Result: Fair Value of $157.17 (UNDERVALUED)

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

However, ongoing regulatory hurdles and growing fee competition could still pressure margins and challenge the bullish case for Hamilton Lane’s future growth.

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

Another View: Looking Beyond Fair Value

While analysts see Hamilton Lane as undervalued based on future earning power, our DCF model offers a contrasting perspective. According to the SWS DCF model, the current share price of $114.93 is actually above the estimated fair value of $64.64, which suggests the market may be pricing in more optimistic assumptions than fundamentals currently support. Which view better captures the risk and reward at play?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Hamilton Lane Narrative

If these conclusions do not match your view or you want to dig deeper yourself, you can quickly build your own take from the data above in just a few minutes, 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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