BAM

We rate Brookfield Asset Management Ltd. (BAM) as Avoid with a composite score of 39.5/100 at a current price of $48.82. The stock falls in the bottom quintile of our universe across key quantitative factors, and the multi-factor weakness suggests a high probability of continued underperformance.

The rating is primarily driven by strength in quality (55th percentile) and value (42th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (20th percentile) and investment (25th percentile) tempers our overall conviction. We assign a Narrow Moat rating (63/100), High uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Brookfield Asset Management Ltd. holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 39.5/100 places it at rank #3602 in our full 7,333-stock universe. With a $91.9B market capitalization, Brookfield Asset Management Ltd. operates at meaningful scale within the Finance, Insurance, And Real Estate sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 10%, though momentum at the 20th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 104% (+27.5pp vs sector) narrow to operating margins of 60% (+43.4pp vs sector) and net margins of 55.3%, yielding a gross-to-net conversion rate of 53%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $48.82, Brookfield Asset Management Ltd. is trading near fair value based on current fundamentals. Our value factor score of 42/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 33.2x (a 178% premium to the sector median of 11.9x), EV/EBITDA of 26.9x (at a premium), P/B of 8.9x, P/S of 16.3x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a High uncertainty rating to Brookfield Asset Management Ltd.. Key risk factors include below-average price stability (36th percentile). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: below-average price stability (36th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 36th percentile and quality factor at the 55th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 104% provide a buffer against cost pressures; large-cap scale ($91.9B) provides resilience; a 2.97% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate Brookfield Asset Management Ltd.'s capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 30.4%, a 2.97% dividend yield, best-in-class net margins of 55.3%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — Brookfield Asset Management Ltd. meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 2.97% dividend yield, and the combination of 16.8% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, Brookfield Asset Management Ltd. receives a Avoid rating with a composite score of 39.5/100 (rank #3602 of 7,333). Our quantitative framework assigns a Narrow Moat (63/100, trend: stable), High uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 35/100.

Our analysis does not support a constructive view on Brookfield Asset Management Ltd. at this time. The combination of the current quantitative profile, high uncertainty, and exemplary capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.