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Here's Why Piper Sandler (PIPR) Stock is Worth Betting On
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Piper Sandler Companies (PIPR - Free Report) is well-positioned for growth on its diversified client base and revenue streams, and strong liquidity. Moreover, a solid market presence and operating discipline will further aid financials.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved north by 5.8%. PIPR currently sports a Zacks Rank #1 (Strong Buy).
Over the past year, shares of Piper Sandler have surged 51.8%, outperforming the industry’s rally of 30.4%.
Image Source: Zacks Investment Research
Let’s dive deeper into the reasons that make PIPR stock a lucrative bet now.
Earnings Growth: Piper Sandler witnessed earnings growth of 9.20% over the past three to five years, significantly outperforming the industry average of 4.74%. This was driven by strong operating discipline and revenue growth.
Also, the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average beat being 29.01%.
The Zacks Consensus Estimate for earnings indicates 27.4% growth on a year-over-year basis in 2024.
Revenue Strength: Driven by product expansion and strategic broadening of industry sector coverage, Piper Sandler’s net revenues witnessed a compound annual growth rate (CAGR) of 12.7% over the last four years (2019-2023). The trend continued in the first quarter of 2024 as well. Organic growth measures and diversified offerings are likely to aid top-line expansion. Moreover, its recent initiative to acquire Aviditi Advisors will enable PIPR to provide a comprehensive suite of solutions to its clients, leading to a further boost in revenues.
Further, a strong market presence and client base are likely to keep revenue growth healthy in the near term.
The Zacks Consensus Estimate for revenues indicates 11.9% growth in 2024.
Strong Balance Sheet: As of Mar 31, 2024, PPIR’s total cash and cash equivalents were $70 million and other liabilities and accrued expenses were $83.6 million. Hence, a solid liquidity position allows the company to address its near-term obligations.
Impressive Capital Distributions: PIPR’s capital distribution activities are encouraging. The company has been paying quarterly dividends regularly. Moreover, the company has increased dividends nine times in the last five years with a five-year annualized dividend growth rate of 17.84%. A 25% dividend payout ratio indicates that management is able to provide lucrative returns to its shareholders while keeping sufficient funds for reinvestment.
Further, Piper Sandler has an active share repurchase program, announced in May 2022, with a $150 million authorization set to expire on Dec 31, 2024. As of Mar 31, 2024, $138.2 million worth of shares remained available for repurchase.
Given its decent earnings strength, the company is expected to continue its efficient capital distributions, thus enhancing shareholder value.
Superior Return on Equity (ROE): Piper Sandler’s trailing 12-month ROE reflects its superiority in terms of utilizing shareholders’ funds. The company’s ROE of 13.65% compares favorably with 10.32% of the industry.
The Zacks Consensus Estimate for MS’s current-year earnings has remained unchanged over the past week. Shares of the company have gained 15.3% in the past six months.
The Zacks Consensus Estimate for GS’s 2024 earnings has remained unchanged in the past week. Over the past six months, shares of the company have gained 27.7%.
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Here's Why Piper Sandler (PIPR) Stock is Worth Betting On
Piper Sandler Companies (PIPR - Free Report) is well-positioned for growth on its diversified client base and revenue streams, and strong liquidity. Moreover, a solid market presence and operating discipline will further aid financials.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved north by 5.8%. PIPR currently sports a Zacks Rank #1 (Strong Buy).
Over the past year, shares of Piper Sandler have surged 51.8%, outperforming the industry’s rally of 30.4%.
Image Source: Zacks Investment Research
Let’s dive deeper into the reasons that make PIPR stock a lucrative bet now.
Earnings Growth: Piper Sandler witnessed earnings growth of 9.20% over the past three to five years, significantly outperforming the industry average of 4.74%. This was driven by strong operating discipline and revenue growth.
Also, the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average beat being 29.01%.
The Zacks Consensus Estimate for earnings indicates 27.4% growth on a year-over-year basis in 2024.
Revenue Strength: Driven by product expansion and strategic broadening of industry sector coverage, Piper Sandler’s net revenues witnessed a compound annual growth rate (CAGR) of 12.7% over the last four years (2019-2023). The trend continued in the first quarter of 2024 as well. Organic growth measures and diversified offerings are likely to aid top-line expansion. Moreover, its recent initiative to acquire Aviditi Advisors will enable PIPR to provide a comprehensive suite of solutions to its clients, leading to a further boost in revenues.
Further, a strong market presence and client base are likely to keep revenue growth healthy in the near term.
The Zacks Consensus Estimate for revenues indicates 11.9% growth in 2024.
Strong Balance Sheet: As of Mar 31, 2024, PPIR’s total cash and cash equivalents were $70 million and other liabilities and accrued expenses were $83.6 million. Hence, a solid liquidity position allows the company to address its near-term obligations.
Impressive Capital Distributions: PIPR’s capital distribution activities are encouraging. The company has been paying quarterly dividends regularly. Moreover, the company has increased dividends nine times in the last five years with a five-year annualized dividend growth rate of 17.84%. A 25% dividend payout ratio indicates that management is able to provide lucrative returns to its shareholders while keeping sufficient funds for reinvestment.
Further, Piper Sandler has an active share repurchase program, announced in May 2022, with a $150 million authorization set to expire on Dec 31, 2024. As of Mar 31, 2024, $138.2 million worth of shares remained available for repurchase.
Given its decent earnings strength, the company is expected to continue its efficient capital distributions, thus enhancing shareholder value.
Superior Return on Equity (ROE): Piper Sandler’s trailing 12-month ROE reflects its superiority in terms of utilizing shareholders’ funds. The company’s ROE of 13.65% compares favorably with 10.32% of the industry.
Other Stocks to Consider
Some other top-ranked stocks from the investment banking space worth a look are Morgan Stanley (MS - Free Report) and The Goldman Sachs Group, Inc. (GS - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MS’s current-year earnings has remained unchanged over the past week. Shares of the company have gained 15.3% in the past six months.
The Zacks Consensus Estimate for GS’s 2024 earnings has remained unchanged in the past week. Over the past six months, shares of the company have gained 27.7%.