KKR (KKR) is drawing fresh attention after committing an additional $1.5b of equity to Global Technical Realty, a European data center platform, alongside a roughly $400m commitment from new investor Oak Hill Capital.
See our latest analysis for KKR.
The latest Global Technical Realty commitment comes as KKR’s 90 day share price return of 13.43% contrasts with a 1 year total shareholder return decline of 9.34%. This suggests recent momentum is improving, while long term holders have experienced a tougher run.
If this kind of data center and AI exposure interests you, it may be a utilizeful time to scan the market for other tech and AI names utilizing high growth tech and AI stocks.
With KKR up 13.4% over 90 days, but revealing a 1-year total return decline and trading about 18% below the average analyst tarobtain, is there still upside here or is the market already pricing in future growth?
Most Popular Narrative: 15.3% Undervalued
At a last close of $133.64 versus a narrative fair value of about $157.81, the current price sits well below that internal estimate and puts the focus squarely on how ambitious the earnings and margin assumptions really are.
Ongoing investments in technology, digitization, and origination platforms (e.g., data analytics, AI adoption, 35 origination platforms in ABF and real estate) assist KKR to scale efficiently, improve cost discipline, generate differentiated returns, and protect margins, which contributes to higher net margins and return on equity over time.
Want to see what kind of revenue reset, margin expansion and future P/E multiple are baked into that valuation gap? The full narrative lays out a detailed path for earnings, fee growth and capital markets recovery that goes far beyond headline analyst tarobtains.
Result: Fair Value of $157.81 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, this hinges on fundraising and fee growth holding up, and heavy reliance on performance income means any slowdown in exits could quickly challenge that upside story.
Find out about the key risks to this KKR narrative.
Another Take: Expensive on Earnings Multiples
While the narrative fair value points to KKR seeing undervalued, the earnings multiple view presents a very different picture. On a P/E of 52.4x versus a US Capital Markets average of 25.9x and a fair ratio estimate of 26.2x, the stock screens as richly priced. This raises the question of whether the narrative optimism is running ahead of what the numbers justify.
See what the numbers state about this price — find out in our valuation breakdown.
Build Your Own KKR Narrative
If you see at these assumptions and feel they miss key pieces, or simply prefer to test your own inputs, you can sketch out a custom view in just a few minutes with Do it your way.
A good starting point is our analysis highlighting 1 key reward investors are optimistic about regarding KKR.
Looking for more investment ideas?
Before you relocate on, give yourself the chance to spot opportunities you might otherwise miss by scanning pre filtered ideas built from different angles and themes.
This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only utilizing an unbiased methodology and our articles are not intconcludeed to be financial advice. It does not constitute a recommconcludeation to purchase or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focutilized analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.
Valuation is complex, but we’re here to simplify it.
Discover if KKR might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividconcludes, insider trades, and its financial condition.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
Leave a Reply