Over the past six months, Hamilton Lane’s stock price fell to $119.59. Shareholders have lost 17% of their capital, which is disappointing considering the S&P 500 has climbed by 24.7%. This might have investors contemplating their next move.

Given the weaker price action, is now a good time to buy HLNE? Find out in our full research report, it’s free for active Edge members.

Why Are We Positive On Hamilton Lane?

With over $100 billion in assets under management and supervision, Hamilton Lane (NASDAQ: HLNE) is an investment management firm that specializes in private markets, offering advisory services and fund solutions to institutional and private wealth investors.

1. Skyrocketing Revenue Shows Strong Momentum

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

Over the last five years, Hamilton Lane grew its revenue at an excellent 21.1% compounded annual growth rate. Its growth beat the average financials company and shows its offerings resonate with customers.

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Hamilton Lane’s EPS grew at a remarkable 17.1% compounded annual growth rate over the last five years. This performance was better than most financials businesses.

3. Stellar ROE Showcases Lucrative Growth Opportunities

Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.

Over the last five years, Hamilton Lane has averaged an ROE of 38.5%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Hamilton Lane has a strong competitive moat.

Final Judgment

These are just a few reasons why Hamilton Lane is one of the best financials companies out there. With the recent decline, the stock trades at 25.8× forward P/E (or $119.59 per share). Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.

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