Patria Investments (PAX) AI Stock Analysis

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Patria Investments

(NASDAQ:PAX)

Rating:68Neutral

Price Target:―

Patria Investments demonstrates robust revenue growth and a strong financial structure. However, declining net profit and cash flow, coupled with bearish technical signals, warrant caution. Valuation is moderate with a high dividend yield, and recent earnings call insights are positive, reflecting strategic growth in fundraising and AUM.

Patria Investments (PAX) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.03B

Dividend Yield4.87%

Average Volume (3M)571.73K

Price to Earnings (P/E)28.3

Beta (1Y)0.81

Revenue Growth7.56%

EPS Growth-46.44%

CountryUS

Employees430

SectorFinancial

Sector Strength82

IndustryAsset Management

Share Statistics

EPS (TTM)0.23

Shares Outstanding65,129,960

10 Day Avg. Volume701,237

30 Day Avg. Volume571,731

Financial Highlights & Ratios

PEG Ratio-1.28

Price to Book (P/B)3.38

Price to Sales (P/S)0.00

P/FCF Ratio14.01

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$15.00

Price Target Upside16.82% Upside

Rating ConsensusHold

Number of Analyst Covering2

Patria Investments Business Overview & Revenue Model

Company DescriptionPatria Investments Limited operates as a private market investment firm focused on investing in Latin America. The company offers asset management services to investors focusing on private equity funds, infrastructure development funds, co-investments funds, constructivist equity funds, and real estate and credit funds. Patria Investments Limited was founded in 1994 and is headquartered in Grand Cayman, the Cayman Islands.

How the Company Makes MoneyPatria Investments generates revenue primarily through management fees and performance fees. Management fees are charged based on a percentage of assets under management (AUM), providing a steady income stream as long as investments are maintained. Performance fees, also known as carried interest, are earned when the firm's investment funds exceed predefined return thresholds, aligning the firm's interests with those of its clients. Additionally, Patria may earn fees from advising on transactions or providing ancillary financial services. The firm benefits from its strong network and strategic partnerships in Latin America, enabling access to a broad range of investment opportunities and enhancing its ability to generate returns for its investors.

Patria Investments Financial Statement Overview

Summary

Patria Investments demonstrates strong financial health, with consistent revenue growth and robust profitability. The balance sheet remains solid with low leverage, and cash flow generation is efficient. Minor pressures on gross profit margins and equity growth need monitoring, but the company is well-positioned in the asset management industry.

Income Statement

Very Positive

Patria Investments shows strong profitability with a consistent increase in total revenue from $115 million in 2020 to $329 million in 2023. The gross profit margin remains robust, and the EBIT and EBITDA margins are healthy, indicating effective cost management. However, a slight decrease in gross profit in 2023 compared to 2022 suggests some margin pressure.

Balance Sheet

Positive

The balance sheet is stable with a low debt-to-equity ratio, reflecting a conservative leverage approach. The equity ratio indicates a solid capital structure. However, a modest decrease in stockholders' equity from 2022 to 2023 signifies potential pressures on equity growth.

Cash Flow

Very Positive

The company has demonstrated strong free cash flow growth from 2020 to 2023, supporting operational liquidity. The operating cash flow to net income ratio is favorable, indicating efficient cash generation relative to net income. However, the fluctuation in financing activities from positive in 2022 to negative in 2023 suggests changing financing strategies.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
314.28M	329.41M	258.88M	235.51M	115.02M	123.22M
	Gross Profit
214.88M	202.74M	224.37M	148.75M	81.83M	80.26M
	EBIT
133.99M	163.65M	111.61M	122.17M	65.13M	64.52M
	EBITDA
137.53M	146.36M	132.81M	130.93M	72.81M	72.80M
	Net Income Common Stockholders
81.70M	118.40M	92.96M	122.48M	62.21M	58.54M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
37.15M	33.20M	312.37M	167.13M	23.98M	37.15M
	Total Assets
114.86M	1.01B	976.24M	761.32M	107.20M	114.86M
	Total Debt
3.10M	15.84M	16.09M	7.86M	1.58M	3.10M
	Net Debt
-1.02M	-214.00K	-10.43M	-7.40M	-12.47M	-1.02M
	Total Liabilities
26.11M	490.24M	462.78M	197.04M	48.13M	26.11M
	Stockholders Equity
81.16M	542.49M	552.79M	564.28M	57.31M	81.16M
Cash Flow		Free Cash Flow
120.03M	141.71M	74.34M	105.72M	52.03M	44.25M
	Operating Cash Flow
136.39M	156.72M	81.05M	107.56M	52.70M	44.47M
	Investing Cash Flow
20.44M	62.17M	-189.35M	-284.23M	23.51M	11.25M
	Financing Cash Flow
-148.48M	-229.63M	118.55M	177.89M	-66.24M	-53.77M

Patria Investments Technical Analysis

Technical Analysis Sentiment

Positive

Last Price12.84

Price Trends

50DMA

11.08

Positive

100DMA

11.25

Positive

200DMA

11.26

Positive

Market Momentum

MACD

0.63

Negative

RSI

76.31

Negative

STOCH

89.97

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAX, the sentiment is Positive. The current price of 12.84 is above the 20-day moving average (MA) of 11.68, above the 50-day MA of 11.08, and above the 200-day MA of 11.26, indicating a bullish trend. The MACD of 0.63 indicates Negative momentum. The RSI at 76.31 is Negative, neither overbought nor oversold. The STOCH value of 89.97 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PAX.

Patria Investments Risk Analysis

Patria Investments disclosed 92 risk factors in its most recent earnings report. Patria Investments 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 1 New Risks

Climate change can create transition risks, physical risks and other risks that could adversely affect us. Q4, 2023

Patria Investments Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GSBD	71 Outperform	$1.29B	25.43	3.27%	15.20%	-28.04%	-69.52%
VRTS	71 Outperform	$1.17B	10.03	13.66%	5.12%	0.63%	1.46%
PAX	68 Neutral	$2.03B	28.31	13.16%	4.87%	7.56%	-46.44%
NMFC	65 Neutral	$1.14B	10.71	8.11%	12.13%	-3.55%	-20.43%
AMTD	64 Neutral	$1.12B	1.44	11.11%	―	―	―
Sector *	64 Neutral	$12.64B	9.78	7.67%	17015.08%	12.23%	-6.02%
PSEC	58 Neutral	$1.60B	―	-4.80%	19.03%	-31.63%	-0.75%

* Financial Sector Average

Performance Comparison

PAX

Patria Investments

12.87

0.50

4.04%

NMFC

New Mountain Finance

10.60

-0.64

-5.69%

PSEC

Prospect Capital

3.34

-1.65

-33.07%

VRTS

Virtus Investment Partners

166.96

-55.72

-25.02%

GSBD

Goldman Sachs BDC

11.00

-2.24

-16.92%

AMTD

AMTD IDEA Group

1.01

-0.72

-41.62%

Patria Investments Earnings Call Summary

Earnings Call Date:May 02, 2025

(Q1-2025)

% Change Since: 21.71%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

The earnings call presents a generally positive outlook with strong fundraising results and growth in fee-earning AUM, despite some challenges in performance-related earnings and the real estate market.

Q1-2025 Updates

Positive Updates

Record Fundraising Achievements

Patria raised a record $3.2 billion in Q1 2025, contributing to a $7.4 billion total over the last 12 months. This brings the company over halfway to its $6 billion fundraising target for the year.

Strong Growth in Fee-Earning AUM

The fee-earning AUM grew 46% year-over-year and 6% sequentially, driven by organic net inflows of over $700 million in Q1 2025, reflecting an annualized growth rate of 8.6%.

Increase in Distributable Earnings

Distributable earnings rose 12% year-over-year to $37 million or $0.23 per share, mainly due to strong fee-related earnings growth.

Resilience in Credit Investment Performance

The credit platform showed strong investment performance, particularly in high-yield credit funds, indicating robust demand and investor interest.

Negative Updates

Performance-Related Earnings Decline

Performance-related earnings were minimal in the quarter, with a noted decline in publicly-listed portfolio companies within private equity.

Challenges in Real Estate Market

High interest rates in Brazil negatively impacted demand for many listed REITs, posing challenges for capital raising in the real estate sector.

Company Guidance

During Patria's first quarter 2025 earnings call, the company highlighted record fundraising of $3.2 billion, aiming to reach a $6 billion target for the year. Fee-related earnings (FRE) were reported at $42.6 million, or $0.27 per share, showing a 16% year-over-year increase despite a 22% sequential decline due to seasonal factors. Fee-earning assets under management (AUM) rose 6% sequentially and 46% year-over-year, with $700 million in organic net inflows, reflecting an annualized growth rate of 8.6%. Patria's total AUM grew to $46 billion, driven by strong fundraising, investment returns, and favorable FX impacts. The company reiterated its 2025 FRE per share guidance of $1.25 to $1.50, aiming for approximately 20% year-over-year growth. They also emphasized the impact of currency fluctuations, noting that a 10% change in soft currencies would only affect FRE by about 2% due to a natural hedge in expenses. Patria remains confident in its fundraising goals, attributing success to its diversified investment strategies and the ability to craft customized solutions for investors, especially amid global economic uncertainties.

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.