Recent performance snapshot for TPG (TPG)

With no single headline event driving attention to TPG (TPG), recent trading performance and fundamentals provide the main reference points for assessing how the stock currently sits.

At a share price of $67.27, TPG has had a 90 day share price return of 22.53%, while the 1 year total shareholder return of 6.27% contrasts with a much stronger 3 year total shareholder return of 135.12%, suggesting that earlier momentum has eased recently.

If TPG has caught your eye and you want to see what else is out there, it could be a good time to broaden your search with fast growing stocks with high insider ownership.

With the shares up strongly over 3 years but trading only slightly below the average analyst price target and with a modest value score, the key question now is whether TPG is undervalued or if the market is already pricing in future growth.

Most Popular Narrative: 2% Overvalued

Compared with TPG's last close of $67.27, the most followed narrative pegs fair value at $66.00, suggesting the shares sit slightly above that estimate.

Analysts are assuming TPG's revenue will decrease by 16.5% annually over the next 3 years. Analysts assume that profit margins will increase from 0.5% today to 36.5% in 3 years time.

If you are curious how falling revenue assumptions still support a higher value case, with much thicker margins and a richer future earnings multiple baked in, read on.

Result: Fair Value of $66 (OVERVALUED)

However, fundraising slowdowns or tougher exits for portfolio companies could quickly pressure fee income and carried interest and, in turn, challenge the current optimism around TPG.

Another View: What The P/S Ratio Is Saying

Our fair value work points to TPG as slightly overvalued, but the P/S ratio tells a more nuanced story. The current P/S of 2.4x sits well below the US Capital Markets industry average of 4.2x and a peer average of 4.5x, yet above the fair ratio of 2x suggested by regression analysis.

In plain terms, the stock trades cheaper than many sector peers, but richer than where the fair ratio implies the market could settle. This raises a simple question for you: is this a margin of safety or a sign that expectations still need to cool?

Build Your Own TPG Narrative

If you look at the numbers and reach a different conclusion, or prefer to work from your own assumptions, you can build a custom view in just a few minutes with Do it your way.

A great starting point for your TPG research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Do not stop with one stock when the market offers so many angles; broaden your search now or you will always wonder what you missed.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.