Hamilton Lane Growth Outlook Sharpens With Wealth Strategy Gains

Core Viewpoint - Goldman Sachs upgraded Hamilton Lane Inc. to Neutral from Sell, citing its growing presence in the retail wealth channel and improved fee growth prospects, despite concerns about limited valuation upside [1][2]. Group 1: Financial Performance and Projections - Goldman Sachs raised its 12-month price forecast for Hamilton Lane to $162, with expectations that evergreen and private wealth strategies will account for over 50% of management fees by 2027, and wealth-related fees projected to grow at a 51% CAGR from 2025 to 2027 [2]. - The company's NAV is expected to reach approximately $31 billion by 2027, driven by stable demand for private market funds and new product launches [2]. - Fee-related performance revenues from U.S. evergreen vehicles, particularly the Private Assets Fund, are anticipated to contribute more significantly, leading to a margin expansion of about 300 basis points from 2024 to 2027 [3]. - Hamilton Lane's earnings per share are estimated to grow nearly 20% annually through 2027, with shares trading at about 25 times estimated 2026 earnings, aligning with peers [4][6]. Group 2: Recent Earnings and Market Reaction - In August, Hamilton Lane reported first-quarter earnings of $1.31 per share, surpassing analyst expectations of $0.97, although this represented a 13% decline from $1.51 a year earlier [5]. - The company's revenue for the quarter was $175.96 million, exceeding the consensus estimate of $168.56 million, but down 11% from $196.73 million in the same quarter the previous year [5]. - The implied PEG ratio of 1.3 is slightly above the sector average, indicating that much of the anticipated growth is already reflected in the stock price, leaving limited room for multiple expansion [6]. - As of the latest check, HLNE shares were trading up by 3.73% to $151.58 [6].