Piper Sandler (PIPR) AI Stock Analysis

• Market Cap: $6.50B
• Dividend Yield: 1.63%
• Average Volume (3M): 165.40K
• Price to Earnings (P/E): 27.7
• Beta (1Y): 1.42
• Revenue Growth: 12.77%
• EPS Growth: 36.43%
• Country: US
• Employees: 1,801
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 3.82
• Shares Outstanding: 17,689,596
• 10 Day Avg. Volume: 222,978
• 30 Day Avg. Volume: 165,398
• PEG Ratio: 0.26
• Price to Book (P/B): 3.87
• Price to Sales (P/S): 3.11
• P/FCF Ratio: 15.95
• Enterprise Value/Market Cap: 0.78
• Enterprise Value/Revenue: 3.04
• Enterprise Value/Gross Profit: 3.05
• Enterprise Value/Ebitda: 17.29
• 1Y Price Target: $392.00
• Price Target Upside: 12.01% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: $341.00 ▼(-2.56% Downside)

Piper Sandler's overall stock score is driven by strong financial performance and positive earnings call highlights, including record revenues and strategic growth in investment banking. However, technical indicators suggest bearish momentum, and valuation metrics indicate potential overvaluation. Cash flow management issues and external risks, such as a government shutdown, also weigh on the score.

Positive Factors

Revenue Growth

The significant revenue growth indicates strong market demand and effective business strategies, positioning the company well for continued expansion.

Operating Margin Improvement

Improved operating margins reflect enhanced operational efficiency, which can lead to better profitability and financial health over the long term.

Strategic Acquisitions

Strategic acquisitions bolster capabilities and market position, enhancing competitive advantage and supporting future growth opportunities.

Negative Factors

Cash Flow Management Issues

Negative cash flow growth can strain financial flexibility, impacting the company's ability to invest in growth opportunities and manage debt.

Potential Government Shutdown Impact

A prolonged government shutdown could disrupt corporate financing activities, affecting revenue streams and financial stability.

Challenges in Consumer Sector

Ongoing challenges in the consumer sector may limit growth potential and hinder the company's ability to diversify revenue sources.

Piper Sandler Business Overview & Revenue Model

Company Description

Piper 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 Money

Piper Sandler generates revenue through several key streams. The primary source of income is investment banking, which includes advisory services for mergers and acquisitions (M&A), capital raising, and underwriting of equity and debt securities. The firm also earns fees from public finance activities, assisting municipalities in funding projects. Additionally, Piper Sandler generates revenue from institutional brokerage services, which encompasses equity research, trading, and sales to institutional investors. The company's asset management division contributes to its earnings by managing investment portfolios for clients, charging management fees based on assets under management. Significant partnerships with various corporations and institutional clients, along with its strong market presence, further enhance its revenue potential.

Piper Sandler Financial Statement Overview

Summary

Piper Sandler has shown strong financial performance with significant revenue growth and robust profitability margins. The balance sheet is solid with no debt and strong equity, while cash flow metrics indicate robust cash generation. However, attention is needed on potential fluctuations in gross profit.

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.

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.

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.67B	1.48B	1.31B	1.38B	1.98B	1.20B
Gross Profit	1.67B	1.48B	1.30B	1.37B	1.97B	1.18B
EBITDA	294.37M	245.48M	159.96M	165.38M	484.22M	123.97M
Net Income	236.42M	181.11M	85.49M	110.67M	278.51M	40.50M
Balance Sheet
Total Assets	2.22B	2.26B	2.14B	2.18B	2.57B	2.00B
Cash, Cash Equivalents and Short-Term Investments	114.00M	482.83M	383.10M	365.62M	970.97M	507.94M
Total Debt	114.66M	98.82M	164.16M	234.77M	214.63M	294.48M
Total Liabilities	756.66M	840.16M	841.51M	927.53M	1.34B	1.07B
Stockholders Equity	1.28B	1.23B	1.09B	1.05B	1.06B	829.42M
Cash Flow
Free Cash Flow	-19.05M	297.76M	265.58M	-255.51M	686.51M	762.18M
Operating Cash Flow	20.66M	313.25M	275.63M	-224.91M	707.09M	779.76M
Investing Cash Flow	-48.81M	-31.77M	-10.05M	-127.10M	-20.58M	-435.00M
Financing Cash Flow	-206.81M	-180.61M	-249.59M	-250.06M	-223.12M	-87.56M

Piper Sandler Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 349.97
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 349.97 is below the 20-day moving average (MA) of 352.98, above the 50-day MA of 339.43, and above the 200-day MA of 303.72, indicating a bullish trend. The MACD of 5.53 indicates Negative momentum. The RSI at 63.35 is Neutral, neither overbought nor oversold. The STOCH value of 85.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PIPR.

Piper Sandler Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MC	78 Outperform	$6.17B	25.63	51.98%	3.69%	51.19%	456.59%
SF	75 Outperform	$13.57B	23.52	11.73%	1.43%	7.54%	2.73%
PJT	71 Outperform	$8.82B	27.90	91.85%	0.58%	23.16%	64.04%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
PIPR	67 Neutral	$6.50B	27.69	19.30%	1.63%	12.77%	36.43%
LAZ	66 Neutral	$4.83B	20.20	36.41%	4.06%	1.58%	1.93%
JEF	63 Neutral	$13.67B	22.83	6.29%	2.52%	-5.41%	25.28%