KKR Is Undervalued

KKR Inc., the global asset management firm is undervalued, according to Wolfteam Ltd.'s projections and estimates. With 18.620 billion USD in revenues and 2 billion USD in profit taken from the 3rd Quarter 2024 KKR earnings statement for the first 9 months of 2024, KKR is on a way to finish 2024 profitably and with growing revenues and profits.

 

Third Quarter 2024 GAAP Results (Unaudited)
GAAP Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders was $0.7 billion for the quarter and
$2.0 billion YTD.
($ in thousands, except per share data) 3Q'23 3Q'24 3Q'23 YTD 3Q'24 YTD
Revenues
Asset Management and Strategic Holdings $ 1,665,012 $ 2,269,090 $ 4,242,390 $ 5,786,007
Insurance 1,650,469 2,522,606 5,827,091 12,834,337
Total Revenues $ 3,315,481 $ 4,791,696 $ 10,069,481 $ 18,620,344
Expenses
Asset Management and Strategic Holdings $ 1,168,348 $ 1,778,343 $ 2,950,149 $ 4,619,272
Insurance 1,147,175 2,898,662 5,347,939 13,317,006
Total Expenses $ 2,315,523 $ 4,677,005 $ 8,298,088 $ 17,936,278
Total Investment Income (Loss) - Asset Management and Strategic Holdings $ 1,819,232 $ 1,598,873 $ 2,907,245 $ 3,602,754
Income Tax Expense (Benefit) 437,210 224,896 910,912 711,066
Redeemable Noncontrolling Interests (3,685) (4,798) (12,728) 57,546
Noncontrolling Interests 895,539 838,916 1,088,622 1,513,518
Preferred Stock Dividends 17,248 — 51,747 —
Net Income (Loss) - KKR Common Stockholders $ 1,472,878 $ 654,550 $ 2,640,085 $ 2,004,690
Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock
Basic $ 1.71 $ 0.74 $ 3.06 $ 2.26
Diluted $ 1.64 $ 0.69 $ 2.95 $ 2.15
Weighted Average Shares of Common Stock Outstanding
Basic 862,123,088 887,444,991 861,598,674 886,618,138
Diluted 909,056,980 941,967,479 911,716,705 933,079,377

 The so called Adjusted Net Income (“ANI”) of $1.2 billion ($1.38/adj. share) in the quarter, up 58%
year-over-year
• ANI was $4.0 billion in the LTM ($4.44/adj. share), up 32% year-over-year

exhibits 58 % growth year on year.

KKR is growing also its assets under management strongly:

Assets Under Management (“AUM”) of $624 billion, up 18% year-over-year
• Fee Paying Assets Under Management (“FPAUM”) of $506 billion, up 19% year-over-year
• New Capital Raised of $24 billion in the quarter and $118 billion in the LTM
• Capital Invested of $24 billion in the quarter and $77 billion in the LTM

One must bear in mind that Wall Street equity research analysts, when modelling the private equity and alternative investment giants like KKR's earnings are modelling future KKR investment performance as 0 (zero). That is, they put 0 probability that KKR will achieve investment return on its investments in private equity funds buyouts, real estate, credit and liquid strategies.

According to Wolfteam Ltd.'s projections such an estimate is not reasonable according to KKR's past investment performance. If one takes into account KKR's past investment performance, one can safely project that KKR will earn a return on its private equity buyout investments. 

KKR's intrinsic value is 180 billion USD according to Wolfteam Ltd.'s projections and estimates. This compares to KKR's current market capitalization of 124.14 billion USD.