Value
6.0/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.4 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 9.4 |
| PEG | 7.4 |
| Analyst target | 5.0 |
- ▸Forward P/E: 8.9x
- ▸PEG: 0.93
AMG · Why this verdict
Why Affiliated Managers Group (AMG) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Affiliated Managers Group delivers 36% operating margins, a perfect Piotroski financial strength score of 9 out of 9, and four consecutive earnings beats, and screens attractively at a forward multiple of 9 times with a PEG ratio near 1.1; however, free cash flow converts at only 31% of net income, RSI sits at an overbought 80, and the stock is just 1.0% below its near-term resistance target — the setup favors patience over adding.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company ranks among the highest-quality names in its asset management peer group on financial strength and return metrics, with superior return on equity versus peers and a peer quality ranking that places it in the top tier of the competitive set. Peer rank | Peer-relative quality ranking remains in the top quartile over the next four quarters, confirming that the business continues to earn above-peer returns without deterioration in capital efficiency. | ↓Deteriorating |
| CounterAsset management quality rankings are sensitive to AUM levels and market beta; a sustained market drawdown would compress fee revenues and returns simultaneously across the peer group, and a firm heavily weighted toward equities could see its relative quality advantage narrow faster than its absolute metrics decline. | ||
Despite strong stated margins of 36%, free cash flow converts at only 31% of net income — a red flag indicating that a significant portion of reported earnings does not translate to distributable cash, raising questions about the reliability of the earnings base. Quality breakdown | Free cash flow as a percentage of net income rises above 60% over the next four quarters, demonstrating that the earnings-to-cash conversion gap is structural and closing. | ↓Deteriorating |
| CounterIn an asset management context, a low FCF-to-net-income ratio can reflect discretionary reinvestment in new affiliate relationships or seed capital deployment; if these outlays are management-controlled and capable of reversal, the conversion gap can close rapidly without requiring a structural fix. | ||
The company has beaten consensus EPS estimates in each of the last four quarters — delivering $8.23, $9.48, $6.10, and $5.39 against estimates of $8.07, $8.84, $5.88, and $5.29 — a track record of consistently under-promising and over-delivering that supports the current valuation. Earnings | EPS beats consensus in each of the next two quarters with a positive surprise percentage, extending the streak to six consecutive beats. | →Stable |
| CounterA four-quarter beat streak averaging roughly 4% can narrow as analysts calibrate to the pattern; any softening in carried interest realizations or AUM contraction from market depreciation could shift a near-beat to an in-line or miss, removing the execution premium embedded in the current price. | ||
RSI at 80 signals an overbought condition, the stock sits within 3% of its 52-week high, and only 1.0% of headroom remains to the near-term resistance target — a combination that leaves the setup stretched and vulnerable to a pullback on any catalyst for profit-taking. Momentum breakdown | RSI returns to between 50 and 65 over the next four to eight weeks without price falling more than 8% from the current $352.93 level, indicating a healthy consolidation that resets the technical setup without breaking the uptrend. | ↑Improving |
| CounterOverbought readings in strongly trending names can persist for extended periods when the fundamental backdrop is improving; with a forward multiple of 9 times still well below the long-run average for quality asset managers, the RSI extreme may be a transient consequence of re-rating rather than a reversal warning. | ||
The company ranks among the highest-quality names in its asset management peer group on financial strength and return metrics, with superior return on equity versus peers and a peer quality ranking that places it in the top tier of the competitive set.
↓DeterioratingPeer rank
- Expectation
- Peer-relative quality ranking remains in the top quartile over the next four quarters, confirming that the business continues to earn above-peer returns without deterioration in capital efficiency.
CounterAsset management quality rankings are sensitive to AUM levels and market beta; a sustained market drawdown would compress fee revenues and returns simultaneously across the peer group, and a firm heavily weighted toward equities could see its relative quality advantage narrow faster than its absolute metrics decline.
Despite strong stated margins of 36%, free cash flow converts at only 31% of net income — a red flag indicating that a significant portion of reported earnings does not translate to distributable cash, raising questions about the reliability of the earnings base.
↓DeterioratingQuality breakdown
- Expectation
- Free cash flow as a percentage of net income rises above 60% over the next four quarters, demonstrating that the earnings-to-cash conversion gap is structural and closing.
CounterIn an asset management context, a low FCF-to-net-income ratio can reflect discretionary reinvestment in new affiliate relationships or seed capital deployment; if these outlays are management-controlled and capable of reversal, the conversion gap can close rapidly without requiring a structural fix.
The company has beaten consensus EPS estimates in each of the last four quarters — delivering $8.23, $9.48, $6.10, and $5.39 against estimates of $8.07, $8.84, $5.88, and $5.29 — a track record of consistently under-promising and over-delivering that supports the current valuation.
→StableEarnings
- Expectation
- EPS beats consensus in each of the next two quarters with a positive surprise percentage, extending the streak to six consecutive beats.
CounterA four-quarter beat streak averaging roughly 4% can narrow as analysts calibrate to the pattern; any softening in carried interest realizations or AUM contraction from market depreciation could shift a near-beat to an in-line or miss, removing the execution premium embedded in the current price.
RSI at 80 signals an overbought condition, the stock sits within 3% of its 52-week high, and only 1.0% of headroom remains to the near-term resistance target — a combination that leaves the setup stretched and vulnerable to a pullback on any catalyst for profit-taking.
↑ImprovingMomentum breakdown
- Expectation
- RSI returns to between 50 and 65 over the next four to eight weeks without price falling more than 8% from the current $352.93 level, indicating a healthy consolidation that resets the technical setup without breaking the uptrend.
CounterOverbought readings in strongly trending names can persist for extended periods when the fundamental backdrop is improving; with a forward multiple of 9 times still well below the long-run average for quality asset managers, the RSI extreme may be a transient consequence of re-rating rather than a reversal warning.
Per-dimension breakdown
Quality
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.1 |
| ROA | 2.1 |
| Gross margin | 6.1 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.0 |
| FCF quality | 2.6 |
| Moat | 8.2 |
| Piotroski F | 10.0 |
- ▸Strong margins: 38%
- ▸Earnings quality RED FLAG: 32% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 30% YoY
Momentum
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 3.4 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 7.7 |
| Price target | 7.2 |
- ▸Light analyst coverage (7.0) — signal dampened
Insider
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 5.0 |
| holder change | 3.6 |
| notable moves | 3.0 |
- ▸Modest insider selling — $5,691,065 (0.058% of mkt cap)
Peer rank
5.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.1 |
| quality rank | 7.3 |
| growth rank | 8.9 |
- ▸Superior ROE vs peers
- ▸Industry growth leader
Technical
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.8 |
| support resistance | 2.9 |
| 52w position | 9.1 |
Risk (lower is worse)
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.0 |
| days to cover | 8.0 |
| volatility | 4.5 |
| put call | 0.0 |
| implied vol | 4.0 |
| max pain risk | 3.0 |
| beta | 6.6 |
| debt equity | 6.4 |
- ▸Elevated put/call: 3.64
- ▸Above max pain $220
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.7 |
| dividend safety | 6.8 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier +2 (HOLD_IF_HOLDING → STRONG_BUY_WAIT).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=+2|ENTRY_STICKY:WITHIN_BANDPassed (7)
- MOMENTUM:5.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:77d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.1<1.5@spot
Warning (0)
none
Reward-to-Risk
0.06
Upside
+0.7%
Downside
12.4%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.6>=5.5. Top dim: Growth at 10.0; weakest: Insider at 4.0. No conviction either direction.
The strongest dimensions are Growth at 10.0, Quality at 6.9, and Sentiment at 6.7; the weakest are Insider at 4.0, Technical at 4.9, and Risk (lower is worse) at 5.1. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 0.06 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Peer Relative Quality Superiority
Trip ifPeer quality ranking falls below the top 50th percentile for 2 consecutive quarters.
- P2Poor Free Cash Conversion
Trip ifFree cash flow as a percentage of net income rises above 60% for 2 consecutive quarters.
- P3Consistent Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P4Overbought Near Resistance
Trip ifRSI drops below 50 and price falls more than 10% below the current $352.93 level.