Acadian Asset Management (AAMI): Evaluating Valuation Following Strong Recent Gains

Acadian Asset Management (AAMI) has seen some strong performance numbers recently, with nearly 80% gains year-to-date and a 95% rise over the past year. For investors, this track record can spark questions about what is driving such momentum.

See our latest analysis for Acadian Asset Management.

Momentum appears to be building for Acadian Asset Management, with recent share price gains catching investors’ attention. A one-year total shareholder return of just under 1% is signaling continued confidence and the potential for further growth ahead.

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With recent gains and a steady track record, investors now face a pivotal question: Is Acadian Asset Management still undervalued at these levels, or is the current price already factoring in much of the anticipated growth?

Price-to-Earnings of 18.5x: Is it justified?

Acadian Asset Management trades at a price-to-earnings (P/E) ratio of 18.5x, slightly below the broader US market’s average but above some of its peer group.

The price-to-earnings ratio reflects how much investors are willing to pay for each dollar of current earnings. In sectors like capital markets, this metric offers insight into whether the market expects future earnings growth or is pricing in potential risk factors.

In Acadian’s case, this multiple is below the overall US average of 19.2x, signaling relative value versus the market at large. However, it comes in above the peer average of 17.9x, which hints that optimism exists on the back of the company's recent performance momentum. Comparatively, Acadian looks more affordable than the US Capital Markets industry, where the average P/E is 26.2x. However, it is still pricier than its closest rivals.

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

Result: Price-to-Earnings of 18.5x (ABOUT RIGHT)

However, lingering concerns about recent share price volatility and the company trading above some analyst targets could present challenges to optimistic expectations going forward.

Find out about the key risks to this Acadian Asset Management narrative.

Another View: Discounted Cash Flow Puts a Different Spin

Taking a different approach, the SWS DCF model estimates Acadian Asset Management's fair value at just $17.74. This is much lower than the current share price of $46.24. This points to possible overvaluation and raises the question of whether the optimism seen in the market is really justified.

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

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Acadian Asset Management 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 Acadian Asset Management Narrative

If you want to dive deeper or reach your own conclusions, you can analyze the data and shape your perspective in just minutes with Do it your way.

A great starting point for your Acadian Asset Management research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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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