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Why Hamilton Lane (HLNE) Might be Well Poised for a Surge

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Hamilton Lane (HLNE) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this private-market investment firm, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for Hamilton Lane, as there has been strong agreement among the covering analysts in raising estimates.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The earnings estimate of $0.75 per share for the current quarter represents a change of +27.12% from the number reported a year ago.

The Zacks Consensus Estimate for Hamilton Lane has increased 32.3% over the last 30 days, as four estimates have gone higher compared to no negative revisions.

Current-Year Estimate Revisions

The company is expected to earn $2.53 per share for the full year, which represents a change of +25.87% from the prior-year number.

The revisions trend for the current year also appears quite promising for Hamilton Lane, with four estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 24.94%.

Favorable Zacks Rank

Thanks to promising estimate revisions, Hamilton Lane currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for Hamilton Lane have attracted decent investments and pushed the stock 5.6% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.


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Hamilton Lane Inc. (HLNE) : Free Stock Analysis Report

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