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Piper Sandler (PIPR)
NYSE:PIPR
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Piper Sandler
(NYSE:PIPR)
71Outperform
Positive Factors
Business Strategy
The firm has heavily invested in talent to expand its platform, particularly in the Advisory business, which is expected to drive incremental growth.
Financial Performance
Piper Sandler delivered a strong quarter with adjusted revenues significantly above estimates, indicating strong company performance.
Negative Factors
Market Volatility
Timely investor meetings with Piper Sandler management address recent market volatility, adding some near-term uncertainty.
Piper Sandler (PIPR) vs. S&P 500 (SPY)
Market Cap
$4.74B
Dividend Yield0.95%
Average Volume (3M)176.96K
Price to Earnings (P/E)23.4
Beta (1Y)1.42
Revenue Growth12.29%
EPS Growth99.57%
CountryUS
Employees1,801
SectorFinancial
Sector Strength87
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)4.09
Shares Outstanding17,756,739
10 Day Avg. Volume160,378
30 Day Avg. Volume176,955
Financial Highlights & Ratios
PEG Ratio1.81
Price to Book (P/B)3.68
Price to Sales (P/S)0.00
P/FCF Ratio15.01
Enterprise Value/Market Cap0.86
Enterprise Value/Revenue0.70
Enterprise Value/Gross Profit3.53
Enterprise Value/Ebitda4.72
Forecast
1Y Price Target
$330.00Price Target Upside23.61% Upside
Rating ConsensusHold
Number of Analyst Covering1
Piper Sandler Business Overview & Revenue Model
Company DescriptionPiper Sandler Companies operates as an investment bank and institutional securities firm that serves corporations, private equity groups, public entities, non-profit entities, and institutional investors in the United States and internationally. The company offers investment banking and institutional sales, trading, and research services for various equity and fixed income products. It provides advisory services, such as mergers and acquisitions, equity private placements, and debt and restructuring advisory; raises capital through equity and debt financings; underwrites municipal issuances; and offers municipal financial advisory and loan placement services, as well as various over-the-counter derivative products. The company also offers public finance investment banking services that focus on state and local governments, and cultural and social service non-profit entities, as well as the education, healthcare, hospitality, senior living, and transportation sectors. In addition, it provides equity and fixed income advisory and trade execution services for institutional investors, and government and non-profit entities. Further, the company is involved in the alternative asset management funds merchant banking and healthcare to invest firm capital and to manage capital from outside investors, as well as trading activities. The company was formerly known as Piper Jaffray Companies and changed its name to Piper Sandler Companies in January 2020. Piper Sandler Companies was founded in 1895 and is headquartered in Minneapolis, Minnesota.
How the Company Makes MoneyPiper Sandler makes money primarily through its investment banking and institutional securities operations. The company's revenue streams include advisory fees from mergers and acquisitions, underwriting fees from debt and equity offerings, and trading commissions from securities transactions. Additionally, Piper Sandler generates revenue from asset management fees, which are based on the assets under management (AUM) and performance of the investment funds. The company's earnings are also influenced by market conditions and economic trends, as well as its strategic partnerships and client relationships in various industries.
Piper Sandler Financial Statement Overview
Summary
Piper Sandler exhibits robust financial performance with strong revenue growth and profitability. The income statement shows a 13.6% increase in revenue, though a decrease in gross profit is noted. The balance sheet is strong with no debt and solid equity. Cash flow is positive, but the high free cash flow to net income ratio warrants attention.Income Statement
Piper Sandler has demonstrated a strong income statement performance with a notable increase in revenue from $1.35 billion in 2023 to $1.53 billion in 2024, reflecting a revenue growth rate of approximately 13.6%. The gross profit margin in 2024 was approximately 34.4%, while the net profit margin was around 11.8%. The EBIT and EBITDA margins were both approximately 31.7%. These margins indicate robust profitability, although the decrease in gross profit from 2023 is a point of concern.75
Positive
Balance Sheet
The balance sheet reveals a strong financial position with no total debt as of 2024, significantly improving from the prior year. The debt-to-equity ratio is 0, indicating no leverage, while the equity ratio stands at 54.4%, showing a solid equity base. Return on equity (ROE) is approximately 14.8%, which is healthy for the industry, reflecting efficient use of equity to generate profit.80
Positive
Cash Flow
Piper Sandler's cash flow statement shows a positive trajectory, with free cash flow growing from $265.58 million in 2023 to $297.76 million in 2024, translating to a growth rate of approximately 12.1%. The operating cash flow to net income ratio is 1.73, indicating strong cash generation relative to net profits. However, the free cash flow to net income ratio is a high 1.64, suggesting the company is generating significant free cash flow relative to net income.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.53B | 1.35B | 1.37B | 1.97B | 1.18B |
| Gross Profit | ||||
| 527.42M | 1.21B | 307.79M | 587.17M | 220.24M |
| EBIT | ||||
| 485.18M | 312.55M | 168.98M | 389.66M | 59.70M |
| EBITDA | ||||
| 251.16M | 0.00 | 326.48M | 330.37M | 0.00 |
| Net Income Common Stockholders | ||||
| 181.11M | 85.49M | 110.67M | 278.51M | 40.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 482.83M | 383.10M | 365.62M | 970.97M | 507.94M |
| Total Assets | ||||
| 2.26B | 2.14B | 2.18B | 2.57B | 2.00B |
| Total Debt | ||||
| 98.82M | 164.16M | 234.77M | 214.63M | 294.48M |
| Net Debt | ||||
| -384.01M | -218.93M | -130.85M | -756.34M | -213.46M |
| Total Liabilities | ||||
| 840.16M | 841.51M | 927.53M | 1.34B | 1.07B |
| Stockholders Equity | ||||
| 1.23B | 1.09B | 1.05B | 1.06B | 829.42M |
| Cash Flow | Free Cash Flow | |||
| 297.76M | 265.58M | -255.51M | 686.51M | 762.18M |
| Operating Cash Flow | ||||
| 313.25M | 275.63M | -224.91M | 707.09M | 779.76M |
| Investing Cash Flow | ||||
| -31.77M | -10.05M | -127.10M | -20.58M | -435.00M |
| Financing Cash Flow | ||||
| -180.61M | -249.59M | -250.06M | -223.12M | -87.56M |
Piper Sandler Technical Analysis
Positive
266.96
Price Trends
245.27
Positive
269.82
Negative
279.24
Negative
Market Momentum
7.12
Negative
63.79
Neutral
77.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PIPR, the sentiment is Positive. The current price of 266.96 is above the 20-day moving average (MA) of 249.62, above the 50-day MA of 245.27, and below the 200-day MA of 279.24, indicating a neutral trend. The MACD of 7.12 indicates Negative momentum. The RSI at 63.79 is Neutral, neither overbought nor oversold. The STOCH value of 77.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PIPR.
Piper Sandler Risk Analysis
Piper Sandler disclosed 32 risk factors in its most recent earnings report. Piper Sandler 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
Piper Sandler Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $9.29B | 23.14 | 29.73% | 1.32% | 26.88% | 68.65% | |
75 Outperform | $5.27B | 26.48 | 96.33% | 0.66% | 16.04% | 60.32% | |
72 Outperform | $4.36B | 16.17 | 59.68% | 4.31% | 9.54% | ― | |
71 Outperform | $4.74B | 23.35 | 17.59% | 0.95% | 12.29% | 99.57% | |
71 Outperform | $4.33B | 15.02 | 16.69% | ― | 67.71% | 19.42% | |
68 Neutral | $4.91B | 28.15 | 39.98% | 3.98% | 45.14% | ― | |
64 Neutral | $12.82B | 9.87 | 7.67% | 17000.34% | 12.39% | -5.85% |
* Financial Sector Average
Performance Comparison
PIPR
Piper Sandler
266.96
56.57
26.89%
EVR
Evercore Partners
240.26
39.90
19.91%
SNEX
StoneX Group
88.60
39.51
80.48%
LAZ
Lazard
46.03
6.72
17.09%
MC
Moelis
60.88
6.16
11.26%
PJT
PJT Partners
150.91
48.36
47.16%
Piper Sandler Earnings Call Summary
Earnings Call Date:May 02, 2025
(Q1-2025)
| % Change Since: 9.95%|
Next Earnings Date:Jul 25, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mix of positive growth in specific segments such as investment banking and public finance, but also highlighted challenges in corporate financing and market volatility affecting future outlooks. Despite growth in some areas, uncertainties and anticipated declines in advisory revenues signal a cautious sentiment.Q1-2025 Updates
Positive Updates
Strong Start to 2025
Adjusted net revenues of $383 million, a 17.9% operating margin, and adjusted EPS of $4.09, all up compared to the same period last year.
Increase in Corporate Investment Banking Revenues
Corporate investment banking revenues totaled $253 million, reflecting a 20% increase year-over-year, with advisory services revenues increasing by 38%.
Public Finance Business Growth
Municipal financing revenues grew by 27% year-over-year, outpacing the market issuance growth in par value of 15%.
Equity Brokerage Revenue Increase
Equity brokerage generated $54 million in revenues for the first quarter of 2025, up 10% year-over-year.
Fixed Income Revenue Growth
Fixed income revenues increased by 7% from the year-ago quarter driven by solid activity across most client verticals.
Increase in Managing Directors
The firm finished the quarter with 182 managing directors, a 6% increase from a year ago, highlighting expansion efforts.
Negative Updates
Challenged Corporate Financing Activity
Corporate financing revenues were down 32% from the year-ago period, with a weakened market environment for equity underwriting.
Anticipated Decline in Advisory Revenues
Second quarter advisory revenues are expected to decline from the first quarter levels due to heightened market volatility.
Uncertainty and Volatility
Heightened volatility in equity and debt markets and continued uncertainty are impacting client engagement and market activity.
Challenges in Consumer and Energy Sectors
Consumer goods, especially those sourced in China, and energy sectors are facing challenges due to market conditions.
Company Guidance
During the Piper Sandler Companies First Quarter 2025 Earnings Conference Call, management outlined several key metrics and provided guidance amidst a challenging market environment. The company reported adjusted net revenues of $383 million, a 17.9% operating margin, and an adjusted EPS of $4.09, all showing growth compared to the previous year. The corporate investment banking division saw a 20% year-over-year increase in revenues to $253 million, with advisory services contributing $217 million, a 38% rise from last year. Despite current market volatility, Piper Sandler remains optimistic due to its diversified sector coverage and product capabilities. However, they anticipate a slowdown in M&A deal cycles and a decline in second-quarter advisory revenues. The public finance segment reported $26 million in municipal financing revenues, a 27% increase year-over-year. The brokerage businesses also showed growth, with equity brokerage revenues up 10% and fixed income revenues up 7% from the previous year. The company finished the quarter with 182 managing directors, reflecting a 6% increase from last year, highlighting strategic hires and expansion into sectors like infrastructure and healthcare investment banking. Piper Sandler remains committed to driving shareholder returns, having repurchased 266,000 shares for $81 million and paid $70 million in dividends.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.