On Friday, Piper Sandler updated its outlook on Abacus Life Inc. (NASDAQ:ABL) shares, raising the price target to $13.00 from $12.00, while reaffirming its Overweight rating on the stock. The revision follows Abacus Life's performance that topped preannounced figures released on October 22.
Abacus Life's revenue and adjusted EBITDA surpassed the initial guidance provided in their preannouncement. The company's deployment was also noted to be robust, with $93 million deployed during the quarter, exceeding Piper Sandler's forecast of $90 million. The strong results throughout the year have led to an upward revision of the adjusted EBITDA estimate for 2024, now set at $59 million, up from the previous $57 million.
In addition to the adjusted EBITDA forecast, Piper Sandler has increased its core EPS estimates for Abacus Life for the years 2024 to 2026. The new projections are $0.60, $0.74, and $0.96 respectively, up from the former estimates of $0.54, $0.71, and $0.88. This adjustment reflects confidence in the company's continued financial strength and growth prospects.
The Overweight rating has been reiterated alongside the price target increase. The new target of $13 is based on approximately 11.5 times the enterprise value to adjusted EBITDA ratio, unchanged from the previous valuation method. The higher target stems from the slightly improved adjusted EBITDA estimates.
Piper Sandler's updated price target and forecasts for Abacus Life signal a positive outlook for the company's financial trajectory, underpinned by strong quarterly deployment figures and an optimistic view for the coming years.
In other recent news, Abacus Life Inc. has reported robust financial results for the quarter ending June 30, 2024, surpassing previous estimates with over $100 million in investments. The company has also expanded its portfolio and assets under management (AUM) through strategic acquisitions of FCF Advisors and Carlisle Management Company SCA, which are projected to add approximately $600 million and $2 billion to its AUM respectively.
Northland has initiated coverage on Abacus Life shares with an Outperform rating, hinting at potential growth and profitability. On the other hand, B.Riley Securities has maintained their positive outlook on the company, adjusting their core earnings per share projections upward for the coming years and revising their price targets.
In addition to these financial developments, Abacus Life has also appointed Elena Plesco as its new Chief Capital Officer, indicating a focus on capital management strategies and global expansion efforts. These are recent developments for Abacus Life.
InvestingPro Insights
Abacus Life Inc.'s recent performance aligns with several key insights from InvestingPro. The company's robust revenue growth is evident, with a remarkable 155.53% increase in quarterly revenue as of Q2 2024. This exceptional growth supports Piper Sandler's positive outlook and increased price target.
InvestingPro Tips highlight that Abacus Life's net income is expected to grow this year, which corresponds with Piper Sandler's upward revision of adjusted EBITDA and core EPS estimates. Additionally, the company's liquid assets exceeding short-term obligations suggest a strong financial position, potentially contributing to its ability to deploy $93 million in the recent quarter.
However, investors should note that Abacus Life has not been profitable over the last twelve months, with a negative P/E ratio of -146.23. Despite this, analysts predict the company will be profitable this year, aligning with Piper Sandler's optimistic forecasts.
For those seeking a more comprehensive analysis, InvestingPro offers 5 additional tips for Abacus Life, providing deeper insights into the company's financial health and market position.
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