Piper Sandler Companies (PIPR) Adds Secondary Advisory Firepower, Is The Stock Still Undervalued?

Piper Sandler Companies (PIPR) drew investor attention after appointing Tim Light as managing director of secondary capital advisory within its private capital advisory group, adding experience in complex secondary transactions and liquidity solutions.

See our latest analysis for Piper Sandler Companies.

Against this leadership change, Piper Sandler Companies’ recent share price performance has been mixed, with the stock at US$75.02 after a 1 day share price return of 2.96%. The year to date share price return is down 14.26%, and the 3 year total shareholder return is 127.11%. This suggests longer term holders have still seen strong gains even as near term momentum has faded.

If this kind of capital markets story has your attention, it can be a good moment to widen your research and look at 19 top founder-led companies

Bulls point to Piper Sandler Companies’ long run of shareholder gains and expanding private capital advisory bench. Bears focus on the recent share price pullback and softer near term returns. Which side do the current valuation numbers lean toward?

Most Popular Narrative: 14.9% Undervalued

At a last close of $75.02, the most followed narrative for Piper Sandler Companies points to a fair value of $88.13. That gap reflects a detailed set of assumptions on future growth, profitability and the return investors require.

Growth in private credit and sponsor activity is expanding the opportunity set for debt capital markets advisory, private capital advisory and restructuring work. This can affect advisory revenues and support operating leverage as more of the fee pool shifts to these higher value services.

Read the complete narrative.

Want to see what is behind that fair value for Piper Sandler Companies? The narrative leans on faster revenue expansion, rising margins and a lower earnings multiple than many peers. Curious how those moving parts fit together in the model and what kind of earnings path they imply by the late 2020s? The full breakdown spells out the numbers driving that $88.13 figure.

Result: Fair Value of $88.13 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, if equity and IPO activity slows or bank deal flow weakens, the Piper Sandler Companies narrative around higher advisory revenues and future repricing could be tested.

Find out about the key risks to this Piper Sandler Companies narrative.

Another View on Piper Sandler Companies

The analyst narrative leans on earnings forecasts and a future P/E of about 17.4x to argue Piper Sandler Companies is undervalued relative to a fair value of $88.13. The SWS DCF model points the other way and estimates future cash flows at $33.61 per share, which implies the current $75.02 price screens as expensive. Which approach do you trust more when cash flow and earnings send different signals?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Piper Sandler Companies for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 48 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With both cautious and optimistic views on Piper Sandler Companies in play, it makes sense to review the numbers yourself and act with intent. To weigh up both sides of the story in one place, start with the 3 key rewards and 1 important warning sign.

Looking for more investment ideas beyond Piper Sandler Companies?

If you are assessing Piper Sandler Companies today, it often pays to stress test your thinking against a wider set of stocks that fit clear, disciplined criteria.

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• Spot fresh opportunities early by checking Piper Sandler Companies against a screener containing 17 high quality undiscovered gems before attention and trading volumes pick up.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused 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.

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