Apollo Stock Touches a New 52-Week High: Is It Worth a Look?

Apollo Global Management, Inc. APO shares touched a new 52-week high of $169.15 on Tuesday before closing the session slightly lower at $168.25. The stock skyrocketed 94.1% in the past year, outperforming its industry’s growth of 61.2% and the S&P 500's rise of 32.6%.Price Performance Image Source: Zacks Investment Research Apollo's business moves and optimistic growth forecast fuelled investor optimism, which drove the stock to a new high.What’s Driving APO Stock?Acquisition & Partnership Deals: Apollo is a high-growth asset management firm with strategies dedicated to investing in companies with strong environmental and social impact. This month, APO extended its multi-billion-dollar partnership with Mubadala Investment Company (“Mubadala”), which is focused on global origination opportunities. This move will further bolster Apollo’s Capital Solutions business and augment its ability to originate investment opportunities across asset classes.In September 2024, Apollo and Citigroup C inked a deal for a subsidiary of Citigroup and certain affiliates of Apollo to establish a revolutionary $25-billion private credit, direct lending program. The program will initially focus on North America, potentially expanding to additional geographies. Both companies expect the program to finance $25 billion of debt opportunities over the next several years, including corporate and financial sponsor transactions. C and Apollo anticipate robust client demand and the ability to extend the program considerably beyond the initial $25 billion.In the same month, State Street Corp.’s STT asset management business, State Street Global Advisors, announced its partnership with Apollo and its affiliates to enhance investors' accessibility to private market opportunities. By leveraging the strengths of STT and APO, this alliance is set to pave the way for investing in private markets, thus appealing to a wider client base.Strategic 5-Year Growth Plan: At the Investor Day Conference held on Oct. 1, 2024, APO outlined its business strategy and financial goals for the next five years (ending 2029).The company expects fee-related earnings (FRE) to witness a 20% average annual growth by 2029, while spread-related earnings (SRE) are projected to see 10% average annual growth by 2029.Management projected $15 in after-tax net income (ANI) per share for 2029. By 2029, Apollo expects to grow its total assets under management (AUM) to $1.5 trillion by scaling its private equity business.Equity AUM is expected to double in the next five years to reach $270 billion. The company has set a massive new goal to double its $562-billion private lending business in five years.The company anticipates expanding its Global Wealth Management business to more than $150 billion by 2029. APO’s management has set a five-year target, inclusive of all origination, both debt origination and equity origination, of more than $275 billion.   Capital Distribution: In May 2024, APO announced a sequential increase in its quarterly dividend. The company declared a quarterly cash dividend of 46 cents per share, a rise of 7.6% from the prior payout. The company increased its dividend six times in the last five years. It currently has a payout ratio of 29%. This indicates that it retains adequate earnings for reinvestment and growth initiatives while delivering lucrative returns to its shareholders.Apart from regular dividend payouts, APO has a share repurchase program. In February 2024, the company’s board of directors authorized the repurchase of up to $3 billion of its common shares. In the first nine months of 2024, the company repurchased $789 million worth of shares. As of Sept. 30, 2024, $1.9 billion worth of shares were available under the authorization. This program replaced the previous plan with an authorization to repurchase up to $500 million shares.APO maintains a decent liquidity position. As of Sept. 30, 2024, the company had total cash and cash equivalents of $15.8 billion, while the total debt was $5.1 billion. Given the decent liquidity position, the company is expected to sustain its capital distribution activities. Through this, APO will keep enhancing shareholder value.Analyst Sentiments Bullish for APOOver the past month, the Zacks Consensus Estimate for earnings of $7.07 and $8.53 per share for 2024 and 2025, respectively, has been revised upward. Estimate Revision Trend Image Source: Zacks Investment Research Is APO Stock Worth Betting On?Apollo, with $733 billion in assets under management as of Sept. 30, 2024, reflects strong growth prospects as evidenced by its earnings strength. The company’s partnerships and acquisitions will broaden its reach and capabilities, positioning it for growth. The 2029 outlook illustrates Apollo's strong growth trajectory.However, in terms of valuation, the APO stock appears expensive relative to the industry. The company is currently trading at the 12-month trailing price-to-earnings ratio of 20.11, above the industry’s 17.59. Price-to-Earnings Image Source: Zacks Investment Research Also, the company’s debt-to-capital ratio is 23.75% higher than the industry’s average of 17.83.Thus, investors should not rush to buy the APO stock at the current level. Rather, they should wait for a better entry point. The Zacks Rank of 3 (Hold) of the company supports our thesis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Citigroup Inc. (C): Free Stock Analysis Report State Street Corporation (STT): Free Stock Analysis Report Apollo Global Management Inc. (APO): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks