Piper Sandler (PIPR): Assessing Valuation After Recent Multi-Year Gains and Share Price Pullback

Piper Sandler Companies (PIPR) has shown some interesting moves recently, catching the attention of investors watching for value shifts. With shares adjusting over the past month, there are nuances to unpack for those tracking financial firms.

See our latest analysis for Piper Sandler Companies.

Despite a dip in share price over the past week and a more subdued 30-day movement, Piper Sandler Companies’ longer-term performance remains impressive, with a 1-year total shareholder return of nearly 15 percent and a massive 3-year gain of over 148 percent. This momentum suggests investors still see strong growth and value potential in the business, even as shorter-term sentiment wavers.

If you’re weighing where the next growth stories could emerge, now is a smart time to broaden your search and discover fast growing stocks with high insider ownership

With Piper Sandler trading about 20 percent below analyst targets but coming off substantial multi-year gains, investors may wonder whether this pullback suggests there is still room for upside or if the market is already anticipating its next phase of growth.

Price-to-Earnings of 22.6x: Is it justified?

Piper Sandler Companies’ current price-to-earnings (PE) ratio stands at 22.6x, just under the Capital Markets industry average of 24x, but well above the 17x peer group average. The recent close at $319.26 places it in an interesting zone relative to both industry expectations and peer benchmarks.

The price-to-earnings ratio reflects how much investors are willing to pay today for a dollar of earnings. It is a key metric for firms in capital markets, where profitability and future growth potential drive multiples. For Piper Sandler, the market appears to price in a strong outlook for earnings, though perhaps with some premium compared to direct peers.

Compared to the industry, Piper Sandler trades at a level that suggests investors see its growth profile as competitive. However, its higher multiple relative to the broader peer group could also signal that the market is optimistic about company-specific catalysts or is willing to pay up for recent earnings strength. There is no fair ratio available for this name, but this multiple implies expectations are robust and could realign if growth softens.

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

Result: Price-to-Earnings of 22.6x (ABOUT RIGHT)

However, sustained growth is not guaranteed. Any slowdown in revenue expansion or a shift in investor sentiment could quickly reverse recent gains.

Find out about the key risks to this Piper Sandler Companies narrative.

Another View: Our DCF Model Paints a Different Picture

Switching perspective, the SWS DCF model values Piper Sandler Companies significantly lower than the current market price. The model estimates fair value at just $61.74, compared to the recent $319.26 close. This approach suggests shares may be dramatically overvalued. Should investors be cautious, or is the market seeing something our model does not?

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 Piper Sandler Companies 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 839 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 Piper Sandler Companies Narrative

If you’re thinking the numbers tell a different story, or you prefer hands-on research, it only takes a few minutes to create your own view and dive deeper. Do it your way

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

Looking for More Investment Ideas?

Act now and expand your portfolio with fresh opportunities that others may overlook. These tailored lists offer a smarter way to spot tomorrow’s leaders and proven income generators.

• Supercharge your returns by tapping into these 839 undervalued stocks based on cash flows, which could be the market’s hidden bargains based on robust cash flow analysis.
• Capitalize on the next evolution in medicine when you select these 33 healthcare AI stocks, combining artificial intelligence with real-world healthcare breakthroughs.
• Boost your steady income stream and secure higher yields by targeting these 20 dividend stocks with yields > 3%, screened for above-average dividend performance.

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