KKR Scores 68% on Small-Cap Growth Investor Model Analysis

KKR & Co Inc gets a 68% rating from Validea’s Small-Cap Growth Investor model, indicating moderate confidence in its fundamentals and valuation. Key strengths include solid profit margins and positive cash flow, while challenges in sales and EPS growth persist.

Date: 19-05-2025

AI Rating: 6

KKR & Co Inc Review
KKR & Co Inc shows a mixed fundamental outlook based on the Small-Cap Growth Investor model. The reported score of 68% indicates a moderate level of confidence from the model, which employs various criteria to assess stock performance.

**Profit Margins** were a highlight, with KKR passing the tests related to both gross and operating margins. This indicates that the company retains a good portion of its revenue as profit, a key metric for investors as it relates to operational efficiency. Similarly, KKR's consistent profit margins bolster investor confidence about its ability to maintain profitability over time, rated positively due to stable operations.

**Cash Flow** also shows a favorable outlook, as KKR passed the cash flow from operations test. This suggests that the company generates sufficient cash from its day-to-day operations, an essential aspect for funding expansion projects or paying dividends.

However, several areas showed weakness, leading to a more cautious appraisal. The company's **Sales** growth and **Earnings Per Share (EPS)** growth relative to the same period last year both failed to meet expectations. These failures indicate sluggish growth and declining earnings potential, which are critical for investors looking for robust growth stocks. When a company struggles to grow its top and bottom lines, it raises red flags about its future performance and ability to compete effectively in its sector.

The **Return on Equity (ROE)** and **Free Cash Flow (FCF)** are not specifically mentioned in this analysis; thus, it lacks sufficient evaluation in these crucial areas, which are strong indicators for assessing management performance and overall company health.

In summary, while KKR's profit margins and cash flow showcase its financial stability, the lack of growth in both sales and EPS raises concerns for investors looking for growth opportunities. The balance of these factors suggests that while KKR has strong fundamentals, potential investors should remain cautious, particularly as earnings momentum appears to be waning, which could affect stock prices in the near term.

Stocks: KKR