GCM Grosvenor (GCMG) AI Stock Analysis

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GCM Grosvenor

(NASDAQ:GCMG)

Rating:62Neutral

Price Target:

$13.00

▲(8.88%Upside)

GCM Grosvenor's strong cash flow and earnings performance are offset by significant balance sheet risks and an extremely high P/E ratio, indicating potential overvaluation. Technical indicators show neutral market momentum, and while recent strategic initiatives and fundraising achievements are positive, they are tempered by industry challenges.

Positive Factors

Earnings Growth

Management reiterated its confidence in being able to double fee-related earnings from 2023 to 2028.

Fundraising

Fundraising was at its highest level in more than two years and the pipeline remains strong despite increasingly challenging market conditions.

Valuation

Its valuation remains well below other alternative solutions.

Negative Factors

Economic Outlook

Greater economic uncertainty and recession risks have weakened the outlook for deployments and realizations.

GCM Grosvenor (GCMG) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.32B

Dividend Yield3.69%

Average Volume (3M)425.41K

Price to Earnings (P/E)87.9

Beta (1Y)0.60

Revenue Growth17.33%

EPS Growth1.83%

CountryUS

Employees549

SectorFinancial

Sector Strength73

IndustryAsset Management

Share Statistics

EPS (TTM)0.18

Shares Outstanding49,994,434

10 Day Avg. Volume404,909

30 Day Avg. Volume425,409

Financial Highlights & Ratios

PEG Ratio-0.09

Price to Book (P/B)-16.85

Price to Sales (P/S)0.00

P/FCF Ratio1.55

Enterprise Value/Market Cap0.28

Enterprise Value/Revenue0.33

Enterprise Value/Gross Profit2.07

Enterprise Value/Ebitda2.77

Forecast

1Y Price Target

$14.63

Price Target Upside22.53% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering5

GCM Grosvenor Business Overview & Revenue Model

Company DescriptionGrosvenor Capital Management, L.P. is global alternative asset management solutions provider. The firm primarily provides its services to pooled investment vehicles. It also provides its services to investment companies, high net worth individuals, pension and profit sharing plans and state or municipal government entities. The firm invests in equity and alternative investment markets of the United States and internationally. The firm invests in multi-strategy, credit-focused, equity-focused, macro-focused, commodity-focused, and other specialty portfolios. It focuses in hedge fund asset classes, private equity, real estate, and/or infrastructure, credit and absolute return strategies. It also focuses in primary fund investments, secondary fund investments, and co-investments with a focus on buyout, distressed debt, mezzanine, venture capital/growth equity investments. The firm seeks to make regionally-focused investments in middle-market buyout. It prefers to invest in aerospace and defense, advanced electronics, information technology, biosciences, and advanced materials. It focuses on Ohio and the Midwest region. The firm employs fundamental and quantitative analysis. Grosvenor Capital Management, L.P. was founded in 1971 and is based in Chicago, Illinois with additional offices in North America, Asia and Europe.

How the Company Makes MoneyGCM Grosvenor primarily generates revenue through management and incentive fees. Management fees are charged to clients based on a percentage of assets under management (AUM) and are typically recurring, providing a steady income stream. Incentive fees, also known as performance fees, are earned when the firm achieves certain performance benchmarks or investment returns on behalf of its clients. Additionally, GCM Grosvenor may earn fees from advisory services and strategic partnerships. The firm's revenue model is supported by its extensive network of investment professionals and its ability to deliver superior risk-adjusted returns across various alternative asset classes.

GCM Grosvenor Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: -4.63%|

Next Earnings Date:Aug 12, 2025

Earnings Call Sentiment Neutral

GCM Grosvenor reported strong financial performance and record fundraising achievements, alongside the launch of strategic initiatives aimed at expanding market reach. However, market conditions and policy uncertainties pose challenges to incentive fee realizations and deployment levels, balancing the positive momentum.

Q1-2025 Updates

Positive Updates

Record Fundraising Achievement

GCM Grosvenor raised $2.9 billion in the first quarter, marking the highest quarterly fundraising level in over two years and the second-highest since going public. Approximately $1.3 billion was raised for the Infrastructure Advantage Fund II, nearly 50% larger than its predecessor.

Strong Financial Performance

First quarter fee-related revenue grew 12% year-over-year, fee-related earnings grew 22%, adjusted EBITDA grew 26%, and adjusted net income grew 30% year-over-year.

Growth in Absolute Return Strategies

Raised $1.6 billion for Absolute Return Strategies since the start of 2024, with a strong pipeline ahead. The multi-strategy composite generated a 10.6% annualized gross return over the last two years, outperforming industry benchmarks.

Strategic Initiatives

Announced a joint venture called Grove Lane targeting the RIA distribution in the U.S. and a strategic partnership in Japan, which aims to raise at least $1.5 billion by 2030.

Increased AUM and Fee-Paying AUM

Assets under management grew to $82 billion, and fee-paying AUM grew to $66 billion. Contracted not yet fee-paying AUM grew 16% year-over-year to $8.2 billion.

Negative Updates

Muted Incentive Fee Realizations

Market conditions are expected to result in muted incentive fee realizations in the near term, with the firm's gross unrealized carried interest standing at $865 million.

Uncertainty in Deployment and Transaction Levels

Trade and tax policy uncertainty is likely to keep deployment and transaction levels depressed, impacting incentive fee levels for the industry and GCM Grosvenor.

Limited Catch-Up Fees Anticipated

With the final close of IAF II, limited additional catch-up fees are anticipated between now and year-end due to the mix of offerings in the market.

Company Guidance

In the first quarter of 2025, GCM Grosvenor reported strong financial performance, surpassing profitability expectations with significant fundraising achievements. The company raised $2.9 billion, marking its highest quarterly fundraising in over two years, with half of this amount allocated to infrastructure, including a substantial final close of nearly $500 million for the Infrastructure Advantage Fund II. Private equity also contributed significantly, raising over $720 million. Financially, the firm saw a 20% year-over-year increase in private markets management fees, a 12% rise in fee-related revenue, and a 22% growth in fee-related earnings. Adjusted EBITDA increased by 26%, while adjusted net income grew by 30% year-over-year. The company also announced strategic initiatives, including a joint venture, Grove Lane, targeting individual investors, and a partnership in Japan, aiming to raise $1.5 billion by 2030. Despite market volatility, GCM Grosvenor remains optimistic about its ability to surpass last year's fundraising total of $7.1 billion and expects mid-single-digit growth in private markets fee-related revenue for the full year.

GCM Grosvenor Financial Statement Overview

Summary

GCM Grosvenor shows strong cash flow management with rising EBIT and EBITDA margins, but the balance sheet poses significant risks due to negative equity and high leverage. The income statement highlights some profitability with potential revenue volatility.

Income Statement

Positive

The income statement displays a mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin is healthy at approximately 59.1%, indicating effective cost control despite a slight decline in total revenue. The net profit margin is modest at 3.2%, reflecting some profitability challenges. Revenue growth shows volatility with a recent decline, but EBIT and EBITDA margins improved, suggesting operational enhancements.

Balance Sheet

Neutral

The balance sheet highlights significant risks with a negative stockholders' equity, indicating potential solvency issues. The debt-to-equity ratio is not calculable due to negative equity, but total debt is substantial. The equity ratio is negative, further emphasizing financial risk. However, the company maintains a reasonable level of cash and cash equivalents.

Cash Flow

Positive

Cash flow analysis is strong, with substantial free cash flow growth and a robust operating cash flow to net income ratio of approximately 9.3 times, suggesting efficient cash generation. The free cash flow to net income ratio is also high, indicating strong cash flow relative to net earnings.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
532.41M	514.01M	445.00M	446.53M	531.59M	429.98M
	Gross Profit
314.60M	177.78M	88.95M	169.22M	197.75M	41.52M
	EBIT
101.86M	73.48M	-11.85M	80.31M	109.40M	-40.86M
	EBITDA
93.65M	77.64M	-9.15M	84.17M	113.42M	-45.43M
	Net Income Common Stockholders
17.03M	18.70M	12.77M	79.48M	142.07M	-67.63M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
94.50M	89.45M	44.35M	85.16M	96.19M	198.15M
	Total Assets
579.82M	612.73M	504.94M	488.93M	581.62M	631.89M
	Total Debt
484.01M	485.92M	426.21M	403.15M	390.52M	335.15M
	Net Debt
389.51M	396.46M	381.85M	317.98M	294.33M	137.01M
	Total Liabilities
669.49M	703.07M	616.17M	582.94M	637.42M	556.17M
	Stockholders Equity
-28.32M	-27.62M	-27.63M	-19.82M	-25.71M	-20.02M
Cash Flow		Free Cash Flow
159.74M	132.04M	88.30M	215.73M	178.23M	66.86M
	Operating Cash Flow
157.83M	148.77M	92.06M	216.51M	178.80M	68.17M
	Investing Cash Flow
-24.32M	-31.83M	-18.84M	-10.07M	-28.11M	-5.53M
	Financing Cash Flow
-73.27M	-70.38M	-113.66M	-215.07M	-251.27M	54.76M

GCM Grosvenor Technical Analysis

Technical Analysis Sentiment

Negative

Last Price11.94

Price Trends

50DMA

12.41

Negative

100DMA

12.86

Negative

200DMA

12.20

Negative

Market Momentum

MACD

-0.07

Positive

RSI

35.52

Neutral

STOCH

12.06

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GCMG, the sentiment is Negative. The current price of 11.94 is below the 20-day moving average (MA) of 12.43, below the 50-day MA of 12.41, and below the 200-day MA of 12.20, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 35.52 is Neutral, neither overbought nor oversold. The STOCH value of 12.06 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FHI	80 Outperform	$3.33B	11.87	24.98%	3.23%	2.32%	1.08%
APAM	76 Outperform	$3.41B	11.92	69.81%	6.43%	7.18%	10.17%
GBDC	71 Outperform	$3.91B	13.07	8.88%	10.62%	16.10%	-24.30%
HTGC	70 Outperform	$3.18B	13.51	11.30%	10.46%	-7.29%	-38.60%
Sector *	64 Neutral	$12.77B	9.71	7.85%	78.06%	12.07%	-7.97%
GCMG	62 Neutral	$2.32B	87.86	-12.68%	3.69%	17.33%	1.83%
BRDG	57 Neutral	$2.47B	72.24	-22.41%	4.73%	-1.09%	-120.06%

* Financial Sector Average

Performance Comparison

GCMG

GCM Grosvenor

11.94

2.66

28.66%

FHI

Federated Hermes

42.13

11.43

37.23%

GBDC

Golub Capital Bdc

14.69

0.67

4.78%

HTGC

Hercules Capital

17.98

0.26

1.47%

APAM

Artisan Partners

42.31

5.17

13.92%

BRDG

Bridge Investment Group

9.30

2.47

36.16%

GCM Grosvenor Corporate Events

Executive/Board ChangesShareholder Meetings

GCM Grosvenor Holds Annual Stockholders Meeting 2025

Neutral

Jun 6, 2025

On June 5, 2025, GCM Grosvenor Inc. held its 2025 Annual Meeting of Stockholders, where Class A and Class C common stockholders participated, representing approximately 97.06% of the combined voting power. During the meeting, Michael J. Sacks, Angela Blanton, Francesca Cornelli, David A. Helfand, Jonathan R. Levin, Stephen Malkin, and Samuel C. Scott III were elected as directors, and Ernst & Young LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

The most recent analyst rating on (GCMG) stock is a Hold with a $12.50 price target. To see the full list of analyst forecasts on GCM Grosvenor stock, see the GCMG Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.