KKR Quantitative Stock Analysis

Validea's Growth Investor model, applying Martin Zweig's strategy, rates KKR & CO INC (KKR) at 54%, falling below the 80% threshold typically indicating investment interest. The model, which targets growth stocks with accelerating earnings and sales, reasonable valuations, and low debt, found KKR strong in revenue and sales growth but deficient in critical areas including its P/E ratio, positive current quarter earnings growth, and long-term EPS growth.

Analysis

Validea's Growth Investor model, leveraging Martin Zweig's strategy, assigned KKR & CO INC (KKR) a 54% rating, falling significantly short of the 80% threshold indicating investment interest. This strategy targets growth stocks with persistent accelerating earnings and sales growth, reasonable valuations, and low debt, classifying KKR as a large-cap growth stock in Investment Services.

While KKR passed criteria for revenue growth relative to EPS, overall sales growth rate, and current quarter earnings, it failed several critical fundamental tests. These include its P/E ratio, positive earnings growth rate for the current quarter, earnings growth rate over the past several quarters, and long-term EPS growth. This mixed performance suggests a divergence from the consistent growth profile sought by the model.

The multiple 'Fail' marks in earnings persistence and long-term EPS growth indicate potential inconsistencies in KKR's growth trajectory, which is a core tenet of the Zweig strategy. Furthermore, the P/E ratio's failure suggests the stock's current valuation may not align with the model's "reasonable valuation" requirement, contributing to the overall moderately negative sentiment (-0.4) for KKR.

Key Decisions for Investors

• Investors should approach KKR with caution, as its 54% rating by the Zweig-based Growth Investor model falls well below the threshold for investment interest.
• Consider re-evaluating KKR's current valuation given the model's 'Fail' on its P/E ratio and inconsistencies in long-term earnings growth.
• Monitor upcoming earnings reports for sustained acceleration in EPS and sales growth to assess if fundamental improvements align with the model's criteria.