GCMG

We rate GCM Grosvenor Inc. (GCMG) as a Hold with a composite score of 53.9/100 at a current price of $11.62. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in quality (79th percentile) and value (66th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (24th percentile) and investment (39th percentile) tempers our overall conviction. We assign a Narrow Moat rating (59/100), High uncertainty, and Standard capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; balance sheet deleveraging progress. 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.

GCM Grosvenor Inc. 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 53.9/100 places it at rank #1400 in our full 7,333-stock universe. At $2.4B in market capitalization, GCM Grosvenor Inc. is a mid-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 15%, though momentum at the 24th 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 40% (-36.1pp vs sector) narrow to operating margins of 20% (+3.3pp vs sector) and net margins of 18.9%, yielding a gross-to-net conversion rate of 47%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $11.62, GCM Grosvenor Inc. is trading near fair value based on current fundamentals. Our value factor score of 66/100 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 7.4x (a 38% discount to the sector median of 11.9x), EV/EBITDA of 11.8x (at a premium), P/B of 5.6x, P/S of 1.4x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a High uncertainty rating to GCM Grosvenor Inc.. Key risk factors include significant leverage (336% debt-to-equity), low beta of 0.55 — while defensive, this may indicate limited upside participation in bull markets. 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: significant leverage (336% debt-to-equity); low beta of 0.55 — while defensive, this may indicate limited upside participation in bull markets. 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 49th percentile and quality factor at the 79th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 40% provide a buffer against cost pressures; a 3.65% 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 GCM Grosvenor Inc.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 75.3%, and the balance sheet is managed within acceptable parameters (D/E: 336%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; GCM Grosvenor Inc. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 3.65% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, GCM Grosvenor Inc. receives a Hold rating with a composite score of 53.9/100 (rank #1400 of 7,333). Our quantitative framework assigns a Narrow Moat (59/100, trend: stable), High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 52/100.

Our analysis supports a neutral stance on GCM Grosvenor Inc.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.