Is AllianceBernstein (AB) Undervalued Despite Its Analyst Rating?

AllianceBernstein may be undervalued with mixed growth prospects, but the 5 analysts following the company give it an rating of hold. Their target prices range from $35.0 to $43.5 per share, for an average of $39.1. At today's price of $36.47, AllianceBernstein is trading -6.73% away from its average target price, suggesting there is an analyst consensus of some upside potential for the stock.

AllianceBernstein Holding L.P. is publicly owned investment manager. Based in Nashville, TN, the mid-cap Finance company has 4,436 full time employees. AllianceBernstein has provided a 8.4% dividend yield over the last 12 months.

AllianceBernstein has a trailing twelve month P/E ratio of 13.6, compared to an average of 14.34 for the Finance sector. Based on its EPS guidance of 3.36, the company has a forward P/E ratio of 10.9.

The average compound growth rate of the company's historical and projected earnings per share is 7.8%. On this basis, the company's PEG ratio is 1.78, which suggests that it is overpriced.

AllianceBernstein is overpriced compared to its book value, since its P/B ratio of 2.0 is higher than the sector average of 1.57. The company's shares are currently 4.4% below their Graham number, indicating that its shares have a margin of safety.

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (k) $266,292 $308,404 $416,326 $305,504
Revenue Growth n/a 15.81% 34.99% -26.62%
Net Margins 89.59% 90.59% 92.68% 89.74%
Net Margins Growth n/a 1.12% 2.31% -3.17%
Earnings Per Share $2.49 $2.88 $3.88 $2.69
EPS Growth n/a 15.66% 34.72% -30.67%
Diluted Shares (MM) 96 97 100 114
Free Cash Flow (k) $222,755 $270,014 $355,109 $362,614
FCF Growth n/a 21.22% 31.52% 2.11%
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.