Is KKR Stock Worth Considering as It Soars 83.6% in Past Year?

Core Insights - KKR has demonstrated significant growth in total assets under management (AUM), with a five-year compound annual growth rate (CAGR) of 23.2% from 2018 to 2023, continuing into the first nine months of 2024 [2] - The company aims to reach at least $1 trillion in AUM within five years, supported by its plans to raise over$300 billion of capital by 2026 across various investment strategies [13][14] - KKR's stock has performed exceptionally well, increasing by 83.6% over the past year, outperforming its industry and peers [8] AUM Growth - KKR's AUM growth is attributed to ongoing improvements and additions to its investment strategies [2] - The company expects to tap into an $11 trillion market opportunity in private wealth by 2027 [14] Financial Projections - KKR projects fee-related earnings per share to exceed$4.50, indicating a CAGR of 20% from 2023 to 2026 [15] - Total operating earnings are anticipated to surpass $7 per share, with adjusted net income per share expected to be between$7 and $8, reflecting a CAGR of 30$8.8 million, which is lower than its cash and investments totaling 16.3 million, indicating a strong liquidity position [17] - The company holds an 'A' rating from S&P and Fitch, suggesting a low likelihood of default on debt repayments [17] Shareholder Returns - KKR increased its dividend by 6% to 18 cents per share in March 2024, marking the fifth increase in five years with an annualized growth rate of 7.1% [18] - The company has a share repurchase program, with approximately 69 million remaining under the authorization as of October 2024 [19] Analyst Sentiment - Earnings estimates for KKR for 2024 and 2025 have been revised upward, indicating bullish sentiment among analysts [20] - The Zacks Consensus Estimate for KKR's 2024 earnings suggests a year-over-year growth of 37.7%, while 2025 earnings are expected to rise by 30% [23] Valuation Concerns - KKR's stock is currently trading at a forward 12-month price/earnings (P/E) ratio of 24.96, which is above the industry average of 18.57, indicating a potentially stretched valuation [25] - The stock is also trading at a premium compared to peers Apollo Global Management and Janus Henderson Group [25]