This report is an updated version of the report published on 14 October 2024 at 3:00 PM AEDT.

GQG Partners Inc (ASX: GQG)

GQG Partners Inc (ASX: GQG) is a global boutique asset management firm focused on active equity portfolios. Headquartered in the United States, the firm has built a client base with many prominent institutions and important wholesale platforms around the world.

Recommendation Rationale - SELL at AUD 2.750

• Trading Near the Resistance: GQG’s share price has surpassed its R1 level recommended on 8 October 2024. Therefore, share price can face resistance at the current levels.
• Overvalued Multiples: On a forward 12-month basis – key trading multiples (Price/Book, EV/Sales, EV/EBITDA, Price/Cash Flow, Price/Earnings) are higher than the median of Financials’ sector.
• Higher Operating Expenses: During H1 FY24, GQG’s operating expenses increased by 48.1% YoY, particularly in compensation, benefits, legal fees, and third-party distribution costs. These rising costs may impact profitability and operational efficiency.
• Concentration Risk: A significant portion of GQG’s assets under management is concentrated among top clients, especially within its institutional business. This exposes the firm to the risk of large outflows if key clients choose to reallocate.

GQG’s Daily Chart

(Source: REFNIITIV, Analysis by Kalkine Group)

Valuation Methodology: Price/Earnings Approach (FY Dec'25E) (Illustrative)

Considering that the stock has surpassed its R1 level, market uncertainties, and risks associated, the share price can witness resistance at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 2.750, as of 14 October 2024, at 10:15 AM AEDT.  

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 14 October 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.