Hamilton Lane Inc.'s (NASDAQ:HLNE) growing foothold in the retail wealth channel and stronger fee growth prospects prompted Goldman Sachs to raise its stance on the alternative asset manager, even as it cautioned that valuation leaves limited room for upside.

The bank upgraded the stock to Neutral from Sell and lifted its 12-month price forecast to $162. Analysts led by Alexander Blostein said Hamilton Lane's evergreen and private wealth strategies are expected to account for more than half of management fees by 2027, with wealth-related fees growing at a 51% CAGR from 2025 to 2027.

Goldman said that NAV are projected to reach roughly $31 billion by 2027, supported by stable demand for private market funds and the launch of new products.

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Fee-related performance revenues from U.S. evergreen vehicles, largely the Private Assets Fund, are also expected to become a bigger contributor, helping margins expand by about 300 basis points from 2024 to 2027, according to the bank.

Even with earnings per share growth estimated at nearly 20% annually through 2027, Goldman noted Hamilton Lane shares trade at about 25 times estimated 2026 earnings, excluding stock-based compensation, roughly in line with peers.

In August, Hamilton Lane posted first-quarter earnings of $1.31 a share, beating analyst expectations of 97 cents. The result, however, marked a 13% drop from $1.51 a year earlier. The company's revenue came in at $175.96 million, above the $168.56 million consensus, but down 11% from $196.73 million in the prior-year quarter.

With an implied PEG ratio of 1.3, modestly above the sector average, Goldman said much of the stronger growth outlook is already reflected in the stock, leaving limited room for multiple expansion.

The bank's calendar year EPS forecasts of $5.14 for 2025, $5.85 for 2026, and $7.04 for 2027 are about 2% above consensus on average.

Price Action: HLNE shares were trading higher by 3.73% to $151.58 at last check Thursday.

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