This report is an updated version of the report published on 13 May 2025 at 11:44 AM AEST.

Pinnacle Investment Management Group Limited (ASX: PNI)

Pinnacle Investment Management Group Limited is an Australia-based multi-affiliate investment management company focused on growing a diverse family of investment management firms (Affiliates). Along with holding equity interests in its Affiliates, the Company provides seed funding, global institutional and retail distribution, and industrial grade middle office and infrastructure services.

Recommendation Rationale – SELL at AUD 21.00

• Trading Around Resistance: PNI has crossed its R1 of AUD 19.68 mentioned in the report dated 1 May 2025 and is approaching overbought zone as represented by 14-day RSI reading of ~69.97. Hence, the stock may face some resistance before scaling further upside.
• Jump in Employee Cost: In H1FY25, PNI’s employee costs increased by 8.18% year-over-year to AUD 13.22mn vs AUD 12.22mn in H1FY24.
• Overvalued Multiples: On a forward 12-month basis - key valuation multiples (EV/EBITDA, EV/Sales, Price/Book Value and Price/Cash Flow) are higher than median of the Investment Banking & Investment Services Sector.
• Market Volatility and Investment Performance: PNI earns revenue primarily from performance and management fees, which are tied to assets under management (AUM). Adverse market movements or underperformance by affiliate managers can lead to reduced AUM, lower fees, and redemptions from investors.

PNI Daily Chart

Valuation Methodology: Price/Book Value Approach (FY June'26E) (Illustrative)

Given the H1F25 revenue and NPAT growth, rising contributions from Affiliates, strategic investment by Korea’s National Pension Service, the stock might trade at a slight premium to its peers. For valuation, a few peers like, Hub24 Ltd (ASX: HUB), Qualitas Ltd (ASX: QAL), GQG Partners Inc (ASX: GQG), and others have been considered.

Given its current trading levels, recent rally in the share price, and risks associated, it is prudent to sell the stock at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 21.00, as of 13 May 2025 at 11:43 AM AEST.

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 13 May 2025. 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: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.