A Look at KKR’s Valuation Following Its Major AI Security Investment

KKR (KKR) just made headlines by leading a $230 million Series C round for Ontic, a fast-growing player in the physical security tech space. This is not just another investment. Ontic’s platform focuses on infusing artificial intelligence, smarter threat detection, and robust automation into how companies protect themselves. With KKR’s backing, Ontic is positioned to expand into global markets, and this move highlights KKR’s ongoing push into technology-powered sectors that have the potential for rapid expansion.

For investors, this latest move comes as KKR’s stock has delivered a 15% gain over the past year, even as the company weathered a dip earlier this summer and has recently shown renewed momentum in the past three months. The Ontic news follows M&A rumors surrounding KKR’s reported interest, and subsequent withdrawal, from the La Trobe Financial Services deal. This development signals a clear prioritization of scalable tech investments over more traditional financial services.

After all these shifts, the big question remains: is KKR trading at a discount given its strategic pivot towards high-growth tech, or are investors already factoring in this potential future upside?

Most Popular Narrative: 14.8% Undervalued

According to community narrative, KKR is currently trading below what analysts consider its fair value. This assessment arises from future expected earnings and margin improvements, set against the backdrop of the company’s transformation into alternative and tech-driven markets.

Ongoing investments in technology, digitization, and origination platforms (such as data analytics, AI adoption, and 35 origination platforms in ABF and real estate) help KKR to scale efficiently, improve cost discipline, generate differentiated returns, and protect margins. These factors contribute to higher net margins and return on equity over time.

Ever wonder what metrics actually fuel this bold upside call? The projection behind KKR’s fair value banks on a future-defining shift in profitability, as well as market-beating assumptions detailed in analysts’ models. Curious if these expectations stack up to reality? Read on and see which numbers are powering this potential undervaluation according to the consensus view.

Result: Fair Value of $164.47 (UNDERVALUED)

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

However, rapid growth in asset-based finance and increased competition could dampen earnings and threaten the optimistic outlook if these risks materialize.

Find out about the key risks to this KKR narrative.

Another View: Price Tags Tell a Different Story

Yet, if we look through another lens, the market is clearly charging a premium for KKR compared to the broader industry. This makes the stock appear expensive by standard earnings-based measures. Could this valuation hold up over time?

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 KKR 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 KKR Narrative

If you want to dig into the numbers yourself or think a different angle might reveal more, there’s nothing stopping you from building your personal narrative in just a few minutes. Do it your way.

A great starting point for your KKR research is our analysis highlighting 1 key reward 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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