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Gcm Grosvenor Inc. (GCMG)
:GCMG
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GCM Grosvenor
(NASDAQ:GCMG)
61Neutral
Positive Factors
Earnings Growth
Management reiterated its confidence in being able to double fee-related earnings from 2023 to 2028.
Growth Strategy
Growth was mainly a function of increase commitments to the space from existing clients plus adding a few new relationships every year.
Valuation
The stock is viewed as significantly undervalued.
Negative Factors
Market Recognition
The market is still only just beginning to appreciate the durability and profitability of the solutions providers in general, and GCMG in particular.
GCM Grosvenor (GCMG) vs. S&P 500 (SPY)
Market Cap
$2.50B
Dividend Yield3.32%
Average Volume (3M)418.57K
Price to Earnings (P/E)385.7
Beta (1Y)0.71
Revenue Growth15.42%
EPS Growth41.98%
CountryUS
Employees549
SectorFinancial
Sector Strength82
IndustryAsset Management
Share Statistics
EPS (TTM)0.03
Shares Outstanding44,911,736
10 Day Avg. Volume363,024
30 Day Avg. Volume418,572
Financial Highlights & Ratios
PEG Ratio9.19
Price to Book (P/B)N/A
Price to Sales (P/S)4.91
Price to Cash Flow (P/CF)16.50
P/FCF Ratio16.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.38Price Target Upside16.25% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
GCM Grosvenor Business Overview & Revenue Model
Company DescriptionGCM Grosvenor (GCMG) is a global alternative asset management firm that specializes in a wide range of investment strategies. Founded in 1971, the company is headquartered in Chicago, Illinois, and operates across various sectors including private equity, infrastructure, real estate, and credit. GCM Grosvenor provides customized investment solutions to a diverse client base, including public and private pension funds, sovereign wealth funds, financial institutions, foundations, and endowments.
How the Company Makes MoneyGCM Grosvenor makes money primarily through management and performance fees associated with managing client assets. The company charges management fees based on a percentage of assets under management (AUM) and earns performance fees when specific investment benchmarks are met or exceeded. GCM Grosvenor's revenue streams are bolstered by its diverse product offerings across various asset classes, including private equity, real estate, infrastructure, and credit strategies. Additionally, strategic partnerships and long-term relationships with institutional clients contribute to the company's revenue by ensuring a steady flow of assets to manage and opportunities for co-investments and tailored investment solutions.
GCM Grosvenor Financial Statement Overview
Summary
GCM Grosvenor shows strong revenue growth and excellent cash flow generation, but faces challenges with operational efficiency and a negative equity position.Income Statement
GCM Grosvenor has shown a strong recovery in Total Revenue, with a 15.5% growth from 2023 to 2024. The Gross Profit Margin improved to 34.6% in 2024, indicating better control over costs. However, the Net Profit Margin remains modest at 3.6%. Despite positive EBIT and EBITDA in 2024, the margins are still relatively low, highlighting ongoing challenges in operational efficiency.62
Positive
Balance Sheet
The company shows no debt in 2024, which is positive, but the Stockholders' Equity remains negative, indicating financial instability. The Equity Ratio is also negative due to the negative equity, suggesting a high reliance on liabilities. These factors present a risk to the company's financial health despite improvements in asset growth.45
Neutral
Cash Flow
Operating Cash Flow has increased significantly, and Free Cash Flow is strong, indicating robust cash generation capabilities. The Free Cash Flow to Net Income ratio is favorable, suggesting efficient cash usage relative to net income. These factors demonstrate strong liquidity, despite past fluctuations.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 514.01M | 445.00M | 446.53M | 531.59M | 429.98M | Gross Profit |
| 177.78M | 88.95M | 169.22M | 197.75M | 41.52M | EBIT |
| 73.48M | -11.85M | 80.31M | 109.40M | -40.86M | EBITDA |
| 77.64M | -9.15M | 84.17M | 113.42M | -45.43M | Net Income Common Stockholders |
| 18.70M | 12.77M | 79.48M | 142.07M | -67.63M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 89.45M | 44.35M | 85.16M | 96.19M | 198.15M | Total Assets |
| 612.73M | 504.94M | 488.93M | 581.62M | 631.89M | Total Debt |
| 485.92M | 426.21M | 403.15M | 390.52M | 335.15M | Net Debt |
| 396.46M | 381.85M | 317.98M | 294.33M | 137.01M | Total Liabilities |
| 703.07M | 616.17M | 582.94M | 637.42M | 556.17M | Stockholders Equity |
| -90.34M | -27.63M | -19.82M | -25.71M | -20.02M |
| Cash Flow | Free Cash Flow | |||
| 148.77M | 88.30M | 215.73M | 178.23M | 66.86M | Operating Cash Flow |
| 148.77M | 92.06M | 216.51M | 178.80M | 68.17M | Investing Cash Flow |
| -31.83M | -18.84M | -10.07M | -28.11M | -5.53M | Financing Cash Flow |
| -70.38M | -113.66M | -215.07M | -251.27M | 54.76M |
GCM Grosvenor Technical Analysis
Neutral
13.23
Price Trends
13.43
Negative
12.77
Positive
11.66
Positive
Market Momentum
-0.02
Negative
48.09
Neutral
53.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GCMG, the sentiment is Neutral. The current price of 13.23 is above the 20-day moving average (MA) of 13.13, below the 50-day MA of 13.43, and above the 200-day MA of 11.66, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 48.09 is Neutral, neither overbought nor oversold. The STOCH value of 53.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GCMG.
GCM Grosvenor Risk Analysis
GCM Grosvenor disclosed 82 risk factors in its most recent earnings report. GCM Grosvenor 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
GCM Grosvenor Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $78.12B | 19.11 | 28.29% | 1.35% | -20.40% | -13.30% | |
68 Neutral | $15.59B | 15.56 | 18.90% | 3.24% | 62.87% | ― | |
65 Neutral | $168.31B | 38.14 | 36.95% | 2.86% | 21.25% | 97.42% | |
64 Neutral | $102.69B | 35.29 | 13.23% | 0.61% | 42.19% | -18.20% | |
64 Neutral | $45.70B | 69.96 | 15.93% | 2.57% | 6.12% | -15.84% | |
63 Neutral | $14.20B | 10.11 | 9.01% | 4.34% | 16.34% | -11.27% | |
61 Neutral | $2.50B | 385.71 | -12.68% | 3.32% | 15.42% | 41.98% |
* Financial Sector Average
Performance Comparison
GCMG
GCM Grosvenor
13.23
4.08
44.59%
APO
Apollo Global Management
136.94
26.02
23.46%
KKR
KKR & Co
115.61
16.19
16.28%
BX
Blackstone Group
139.78
12.14
9.51%
CG
Carlyle Group
43.59
-1.42
-3.15%
ARES
Ares Management
146.61
17.64
13.68%
GCM Grosvenor Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: -1.64% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call conveyed a strong positive sentiment, with significant growth in financial metrics, successful fundraising efforts, and strategic progress in key areas such as credit and individual investor channels. While there are some uncertainties around catch-up fees and the timing of fundraising, the overall outlook for 2025 remains optimistic.Highlights
Strong Financial Performance
Fee-related earnings increased by 22% in Q4 2024 and 19% for the full year, while adjusted net income increased by 63% in Q4 2024 and 36% for the full year compared to the previous year.
Significant Fundraising Achievements
Achieved $7.1 billion in total fundraising for 2024, a 40% increase from 2023. The fourth quarter fundraising of $2.3 billion was the highest in more than two years.
Operating Leverage and Margin Expansion
Fee-related earnings margin improved to 42% in 2024 from 38% in 2023 and 31% in 2020, indicating significant operating leverage.
Successful Specialized Fund Closings
Closed $1.9 billion of commitments to private market specialized funds, marking the second highest year on record.
Growth in Credit Platform
Raised $1.8 billion for credit investments, accounting for over 25% of total funds raised in 2024.
Positive Investment Performance
Multi-strategy composite generated a 14.3% gross return for the full year 2024, outperforming indices and peers.
Expansion in Individual Investor Channel
Launched infrastructure interval fund with a seeded portfolio of $240 million, indicating potential for future growth.
Lowlights
Catch-Up Fees Decline
Catch-up fees expected to be lower in Q1 2025 compared to Q4 2024, indicating a potential dip in fee-related income.
Uncertain Timing of Fundraising
Timing of fundraising activities may vary due to factors beyond control, making quarter-to-quarter predictions challenging.
Company Guidance
During the GCM Grosvenor 2024 fourth quarter and full year results call, the company's financial performance metrics were highlighted, showcasing impressive growth across several areas. Fee-related earnings (FRE) increased by 22% in Q4 and 19% for the full year compared to 2023, while adjusted net income rose by 63% in Q4 and 36% for the year. The FRE margin expanded to 42% in 2024 from 38% in 2023. Fundraising efforts were robust, with $7.1 billion raised in 2024, marking a 40% increase from 2023, and Q4 alone brought in $2.3 billion. The private equity seeding strategy, Elevate fund, closed nearly $800 million in a challenging market, and the firm plans to close additional funds in 2025. Assets under management (AUM) reached $80 billion, with fee-paying AUM at $65 billion. The firm also saw strong investment performance, with a 14.3% gross return from their multi-strategy composite for the year. Looking forward, GCM Grosvenor aims to double its 2023 fee-related earnings by 2028, supported by strong industry tailwinds and a diversified platform allowing multiple avenues for growth.GCM Grosvenor Corporate Events
Executive/Board ChangesStock BuybackDividendsFinancial Disclosures
GCM Grosvenor Appoints David A. Helfand to Board
Positive
Feb 10, 2025
On February 6, 2025, GCM Grosvenor’s Board of Directors appointed David A. Helfand to its Board, effective February 20, 2025, filling the vacancy left by Blythe Masters. Helfand, with extensive experience in real estate investment, will serve as chairperson of the audit committee and participate in the non-employee director compensation program. In its financial report for 2024, GCM Grosvenor highlighted a significant fundraising increase of 41% and growth in various earnings metrics, reflecting strong operational performance. The Board approved a dividend of $0.11 per share and increased its share repurchase authorization by $50 million. These financial moves underscore the firm’s positive outlook and commitment to returning value to shareholders.
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.