Apollo Valuation

 

Apollo Global Management or just Apollo, the private equity, credit and insurance business giant is undervalued.

Apollo's intrinsic worth is 170 billion USDs compared with Apollo's current market capitalization of 102.29 billion USDs, according to Wolfteam Ltd.'s projections and estimates. The private markets in which Apollo Global Management is active are in secular, long-term growth trend.

Apollo is very profitable earning 3.018 billion USD in the already reported first nine months of 2024:

GAAP Income Statement (Unaudited)

In millions, except per share amounts) 3Q'23 2Q'24 3Q'24 YTD'23 YTD'24
Revenues
Asset Management
Management fees $462 $462 $476 $1,328 $1,376
Advisory and transaction fees, net 157 267 181 482 617
Investment income (loss) 292 278 230 882 910
Incentive fees 18 47 35 59 108
Retirement Services
Premiums 26 673 389 9,163 1,163
Product charges 217 251 267 622 756
Net investment income 3,166 3,804 4,101 8,726 11,481
Investment related gains (losses) (2,624) (134) 1,539 (1,193) 3,082
Revenues of consolidated variable interest entities 318 366 552 946 1,329
Other revenues 563 4 3 583 9
Total Revenues 2,595 6,018 7,773 21,598 20,831
Expenses
Asset Management
Compensation and benefits (557) (604) (605) (1,743) (1,876)
Interest expense (36) (53) (55) (98) (159)
General, administrative and other (220) (319) (326) (643) (885)
Retirement Services
Interest sensitive contract benefits (333) (1,824) (2,599) (3,634) (7,307)
Future policy and other policy benefits (368) (1,095) (793) (10,346) (2,431)
Market risk benefits remeasurement gains (losses) 441 16 (524) 166 (354)
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired (211) (227) (244) (502) (678)
Policy and other operating expenses (467) (478) (670) (1,356) (1,601)
Total Expenses (1,751) (4,584) (5,816) (18,156) (15,291)
Other Income (Loss) – Asset Management
Net gains (losses) from investment activities (32) (21) 15 (14) 33
Net gains (losses) from investment activities of consolidated variable interest entities 49 1 44 95 70
Other income (loss), net 22 24 70 102 68
Total Other Income (Loss) 39 4 129 183 171
Income (loss) before income tax (provision) benefit 883 1,438 2,086 3,625 5,711
Income tax (provision) benefit (243) (261) (317) (697) (1,000)
Net income (loss) 640 1,177 1,769 2,928 4,711
Net (income) loss attributable to non-controlling interests 42 (324) (958) (637) (1,620)
Net income (loss) attributable to Apollo Global Management, Inc. 682 853 811 2,291 3,091
Preferred stock dividends (22) (25) (24) (22) (73)
Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $660 $828 $787 $2,269 $3,018
Earnings (Loss) per share
Net income (loss) attributable to Common Stockholders - Basic $1.10 $1.36 $1.30 $3.77 $4.96
Net income (loss) attributable to Common Stockholders - Diluted $1.10 $1.35 $1.29 $3.75 $4.94
Weighted average shares outstanding – Basic 579 587 585 581 587
Weighted average shares outstanding – Diluted 579 590 589 582 590

That said, Apollo could become even more profitable. Two-thirds of Apollo's earnings come from the Retirement Services Segment, where there is 430 billion USD of so called perpetual capital from the total of 733 billion USDs of assets Apollo manages. Plowing larger part of Apollo's long-term capital from its insurance business into the profitable private equity and credit investment management businesses of Apollo could unlock tens of billions of USDs of value for Apollo.

In short, Apollo is riding the wave of private capital harboring a lot of unlocked value.