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Hamilton Lane Inc (HLNE)
NASDAQ:HLNE
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Hamilton Lane
(NASDAQ:HLNE)77Outperform
Positive Factors
Growth Profile
HLNE demonstrates substantial strength with a strong growth profile from the firm’s evergreen platform in the vast retail market.
Private Markets Exposure
The broad-based nature of HLNE's private markets exposure is considered the stock's main attribute.
Negative Factors
Valuation Concerns
HLNE's current high P/E ratios and YTD stock price strength keep analysts cautious.
Hamilton Lane (HLNE) vs. S&P 500 (SPY)
Market Cap
$8.38B
Dividend Yield1.25%
Average Volume (3M)549.49K
Price to Earnings (P/E)27.4
Beta (1Y)1.56
Revenue Growth41.16%
EPS Growth64.13%
CountryUS
Employees700
SectorFinancial
Sector Strength93
IndustryAsset Management Services
Share Statistics
EPS (TTM)5.36
Shares Outstanding43,337,230
10 Day Avg. Volume571,515
30 Day Avg. Volume549,491
Financial Highlights & Ratios
PEG Ratio0.43
Price to Book (P/B)N/A
Price to Sales (P/S)12.02
Price to Cash Flow (P/CF)32.80
P/FCF Ratio32.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$171.86Price Target Upside16.96% Upside
Rating ConsensusHold
Number of Analyst Covering7
Hamilton Lane Business Overview & Revenue Model
Company DescriptionHamilton Lane (HLNE) is a leading global private markets investment management firm headquartered in Bala Cynwyd, Pennsylvania. Specializing in private markets, Hamilton Lane offers a range of services including investment management, advisory services, and reporting services to its clients, which include institutional investors such as public pension plans, sovereign wealth funds, endowments, foundations, and family offices. The company is known for its comprehensive approach to private markets investing, leveraging a combination of a global network and deep industry expertise to deliver innovative solutions tailored to clients' needs.
How the Company Makes MoneyHamilton Lane primarily makes money through management and advisory fees. The company earns management fees based on a percentage of the assets under management (AUM) for its investment management services. These fees are typically recurring and provide a stable revenue stream. In addition to management fees, Hamilton Lane generates revenue from performance fees, which are contingent upon achieving certain investment return benchmarks. The firm also earns advisory and reporting fees by providing customized advisory services and reporting solutions to its clients. Strategic partnerships and collaborations with other financial institutions can enhance revenue potential and expand service offerings, though specific partnerships are not detailed.
Hamilton Lane Financial Statement Overview
Summary
Hamilton Lane demonstrates strong financial performance with a high gross profit margin and impressive revenue growth. However, a decreasing net income from 2022 to TTM suggests caution. The balance sheet is solid with moderate leverage, though increasing debt could pose future risks. Cash flow management is robust, highlighting excellent cash generation and financial health.Income Statement
Hamilton Lane demonstrates strong financial performance with a high gross profit margin of 67.1% and a net profit margin of 31.1% in TTM. The company recorded a remarkable revenue growth rate of 24.8% from the previous year, indicating positive growth trajectory. EBIT and EBITDA margins are healthy at 49.3% and 51.6% respectively, showcasing efficient operational management. However, the net income decreased from 2022 to TTM, which could be a concern for sustained profitability.85
Very Positive
Balance Sheet
The company maintains a solid balance sheet with a debt-to-equity ratio of 0.57, suggesting moderate leverage. Return on Equity (ROE) is impressive at 33.2% in TTM, reflecting effective use of shareholder equity. The equity ratio stands at 40.8%, indicating a stable financial position. While the leverage is managed well, the increase in total debt over the years could present future risks if not controlled.78
Positive
Cash Flow
Hamilton Lane exhibits robust cash flow management with a strong operating cash flow to net income ratio of 1.32, and free cash flow to net income ratio of 1.31 in TTM. The free cash flow growth rate is a notable 156.5%, demonstrating excellent cash conversion and financial health. These metrics highlight the company's ability to generate cash efficiently, providing a buffer for investments and operations.90
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 691.66M | 553.84M | 528.75M | 367.92M | 341.63M | 274.05M | Gross Profit |
| 464.11M | 352.35M | 340.29M | 246.16M | 205.32M | 175.53M | EBIT |
| 340.75M | 248.95M | 251.23M | 318.31M | 195.25M | 143.56M | EBITDA |
| 356.79M | 301.02M | 247.48M | 323.81M | 199.38M | 119.72M | Net Income Common Stockholders |
| 215.28M | 140.86M | 187.19M | 247.25M | 168.78M | 126.78M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 114.63M | 114.63M | 111.75M | 72.17M | 87.34M | 50.12M | Total Assets |
| 1.27B | 1.27B | 1.14B | 1.29B | 1.14B | 473.53M | Total Debt |
| 275.19M | 275.19M | 292.35M | 253.57M | 238.46M | 84.71M | Net Debt |
| 160.56M | 160.56M | 180.60M | 181.40M | 151.12M | 34.58M | Total Liabilities |
| 595.24M | 595.24M | 566.35M | 557.46M | 546.32M | 236.13M | Stockholders Equity |
| 525.15M | 525.15M | 415.44M | 346.88M | 238.13M | 154.79M |
| Cash Flow | Free Cash Flow | ||||
| 281.64M | 109.78M | 221.84M | 161.00M | 168.52M | 110.22M | Operating Cash Flow |
| 283.25M | 120.85M | 226.59M | 169.52M | 188.16M | 116.37M | Investing Cash Flow |
| -96.14M | -122.18M | 177.91M | -70.49M | -421.78M | -49.90M | Financing Cash Flow |
| 29.66M | 4.40M | -364.15M | -113.22M | 270.66M | -64.71M |
Hamilton Lane Technical Analysis
Negative
146.94
Price Trends
153.98
Negative
168.69
Negative
153.17
Negative
Market Momentum
-1.90
Positive
38.69
Neutral
41.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLNE, the sentiment is Negative. The current price of 146.94 is below the 20-day moving average (MA) of 157.35, below the 50-day MA of 153.98, and below the 200-day MA of 153.17, indicating a bearish trend. The MACD of -1.90 indicates Positive momentum. The RSI at 38.69 is Neutral, neither overbought nor oversold. The STOCH value of 41.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HLNE.
Hamilton Lane Risk Analysis
Hamilton Lane disclosed 58 risk factors in its most recent earnings report. Hamilton Lane reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Hamilton Lane Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $8.38B | 27.43 | 33.16% | 1.25% | 41.16% | 64.13% | |
73 Outperform | $78.68B | 19.24 | 26.53% | 1.28% | -20.40% | -13.30% | |
68 Neutral | $16.28B | 16.25 | 16.08% | 2.90% | 62.87% | ― | |
67 Neutral | $107.28B | 36.86 | 13.01% | 0.53% | 42.19% | -18.20% | |
66 Neutral | $51.10B | 77.73 | 13.09% | 2.19% | 6.12% | -15.84% | |
65 Neutral | $193.19B | 43.77 | 33.81% | 2.49% | 21.25% | 97.42% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
HLNE
Hamilton Lane
146.94
41.44
39.28%
APO
Apollo Global Management
137.92
30.62
28.54%
KKR
KKR & Co
120.78
24.34
25.24%
BX
Blackstone Group
150.73
30.62
25.49%
CG
Carlyle Group
45.06
-0.22
-0.49%
ARES
Ares Management
160.99
28.66
21.66%
Hamilton Lane Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -7.00% | Next Earnings Date: May 22, 2025
Earnings Call Sentiment Neutral
The earnings call presented strong growth in revenue and assets under management, coupled with recognition for the firm's culture. Despite these positive aspects, there are notable challenges, including increased expenses related to equity-based compensation and high third-party commission expenses. Potential future fee compression in the Evergreen space was also highlighted as a concern.Highlights
Significant Growth in Management and Advisory Fee Revenue
Management and advisory fee revenue grew by 18%, while fee-related earnings grew by 21% compared to the prior year.
Expansion in Assets Under Management
Total asset footprint increased to $956 billion, a 6% increase year-over-year, with AUM standing at $135 billion, up by 12%.
Strong Performance in Specialized Funds
Specialized funds revenue increased by 28%, with a notable $3.8 billion increase in fee-earning AUM within the Evergreen platform.
Recognition of Company Culture
Hamilton Lane was recognized as a Best Place to Work in Money Management for the 13th consecutive year.
Record Incentive Fees
Incentive fees totaled $129 million, up 163% relative to the prior year period, driven by strong performance in secondary funds.
Lowlights
Impact of Equity-Based Compensation on Expenses
Total expenses increased by $67.2 million, driven primarily by higher compensation associated with increased headcount and equity-based compensation.
Potential Fee Compression Concerns
While current fees remain robust, there is an expectation of potential fee compression in the Evergreen space over time.
High Third-Party Commission Expenses
Revenue-related expenses, including third-party commissions related to U.S. Evergreen products, have increased, impacting margin stability.
Company Guidance
During the Hamilton Lane Fiscal Third Quarter 2025 earnings call, the company provided guidance and highlighted key metrics. Year-to-date through the third quarter, management and advisory fee revenue increased by 18%, and fee-related earnings grew by 21% compared to the previous year. The company reported a GAAP EPS of $4.15, based on $167 million of GAAP net income, and a non-GAAP EPS of $3.82, based on $208 million of adjusted net income. Hamilton Lane declared a dividend of $0.49 per share for the quarter, aligning with a targeted 10% increase over the last fiscal year, totaling $1.96 per share for fiscal year 2025. The total asset footprint increased by 6% year-over-year to $956 billion, with AUM reaching $135 billion, a 12% growth. Fee-earning AUM rose to approximately $71 billion, a 13% increase, driven by specialized fund platforms and customized separate accounts. The company continues to benefit from a blended fee rate that has increased to over 60 basis points, excluding retro fees.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.