PIPER SANDLER COMPANIES (PIPR): what the price assumes
In the published model solve dated 2026-Q2, anchored at $76.15, PIPER SANDLER COMPANIES (PIPR) is priced for today's economics sustained for ~6.5 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/PIPR
Headline
| Field | Value |
|---|---|
| Ticker | PIPR |
| Company | PIPER SANDLER COMPANIES |
| Current price | $76.15/sh |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | fee-financial |
| Top-of-range earnings growth must hold for | 6.5y |
| Price-to-earnings | 29.9x |
| Earnings yield | 3.3% |
Solve inputs: computed at a 11.8% cost of equity; growth searched up to the 20% fee-earnings ceiling; each 1pp moves the implied horizon ~1.4 years.
Reconcile: at the x-ray's 9.3% required return this reads ~13.7%/yr; the models below use their own rates.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | +0.28σ |
| cohort percentile (of 51 peers) | 78 |
| sustained it ~6.5 years at this level | 23% |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.22x | 4 | expensive |
| Earnings | 0.77x | 4 | justifies |
| Relative | 0.53x | 4 | justifies |
| Growth | 0.81x | 4 | justifies |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $150.17 | 0.51x | yes | FCF base $0.6B, growth 25% (input: historical growth), terminal g 4.0%, WACC 9.2%, 7yr projection |
| DCF Exit Multiple | Growth | $67.97 | 1.12x | yes | Exit EV/EBITDA: 1147.0x / 1149.0x / 1151.0x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $67.21 | 1.13x | yes | P/E 14.18x (blended: static sector reference 12x + trailing (TTM) 19x), scenarios: 11.4x / 14.2x / 17.0x (bear / base = reference held flat / bull), EV/EBITDA N/Ax |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $200.57 | 0.38x | yes | Stage 1: 20% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $42.75 | 1.78x | yes | BV/sh $18.84, ROE (TTM) 21.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $63.87 | 1.19x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $54.29 | 1.40x | yes | Rev $2.0B, growth 28% (input: historical growth; tapered), Terminal P/S: 2.2x / 2.7x / 3.2x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $457.80 | 0.17x | yes | EPS $13.08, growth 35% (input: historical EPS growth), PEG=0.55 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | $60.89 | 1.25x | yes | BV $18.84 + 5yr PV of (ROE (TTM) 21.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $74.46 | 1.02x | yes | √(22.5 × EPS $13.08 × BVPS $18.84) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | $75.99 | 1.00x | yes | FCF $502.1M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $57.67 | 1.32x | yes | SBC-adj FCF $0.38B (FCF $0.50B − SBC $0.12B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $422.05 | 0.18x | yes | EPS $13.08 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $85.10 | 0.89x | yes | Revenue $2.02B × sector P/S 3.0x |
| PEG Fair Value | Relative | $490.50 | 0.16x | yes | EPS $13.08 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $141.41 | 0.54x | yes | EPS $13.08 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Investment banking & institutional brokerage | operating | enterprise | 1.9B reported-currency | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net cash | $329.4m |
| Net debt / NOPAT (after-tax) | -0.98x (net cash) |
| Net debt / operating income (pre-tax) | -0.76x (net cash) |
| Share count CAGR (dilution) | 0.7% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- At about $82 the price values Piper Sandler near 32 times earnings, a 3.1% earnings yield, which inverts to roughly eight years of fee-earnings growth at the top of the achievable range. That price-to-earnings sits at the very top of the fee-financial peer group, so the bet is less about whether the firm grows and more about how long it can keep growing fast.
- This is an earnings-and-asset-supported name, not a pure growth story. Multiple frames reach the price: earnings power, relative multiples, and the asset-based residual-income and Graham anchors (book value near $19 per share, ROE around 21%) all land in the same neighborhood as the quote, so the price is not detached from the firm's economics.
- The fragility is the revenue mix. Investment banking and advisory fees are deal-dependent and cyclical, and the price extrapolates a strong banking cycle for years. Q1 2026 was a record (net revenue up 33% to about $475M), which raises the bar the firm must keep clearing.
Bull Case
Start with the bear's strongest point, then test whether the data supports it. The obvious worry is that the price embeds a demanding bet: about 32 times earnings, an earnings yield of only 3.1%, and an implied roughly eight-year run of fee-earnings growth near the top of the range, with the price-to-earnings sitting at the very top of the fee-financial cohort. On a thin read that looks like a name priced for perfection. But the inversion's own context softens it: the assumed pace is within what Piper Sandler has actually delivered, and only the duration, the requirement that the pace persist for years, is the stretch. The firm is being asked to keep doing what it has been doing, not to do something new.
What it has been doing is taking share in a recovering banking cycle. Q1 2026 set a record, with net revenue up 33% year over year to about $475M, investment banking at $348M, advisory revenue up 16% to $251M, and corporate financing revenue up 122% to $73.3M, particularly in healthcare. Net income held roughly flat at about $65M as compensation absorbed much of the revenue gain, but the top line is the leading indicator of franchise health, and it is accelerating. Management paired the print with a 14% dividend increase to $0.20 per quarter, the kind of move a fee firm makes when it believes the earnings power is durable rather than a one-quarter spike.
The valuation frames corroborate that this is value-supported, not narrative-supported. The price is reached by earnings power, by relative multiples, and by the asset family at the same time: residual income on a $18.84 book value and a 21% ROE lands near the quote, the Graham number sits just above the price, and the two-stage excess-return model converges in the same range. A capital-light advisory business is worth the fee earnings it throws off rather than its balance sheet, and here even the conservative asset-anchored methods, which do not need the banking cycle to keep booming, support a value close to today's price. That is a different risk profile from a pure growth bet where only the optimistic frame can reach the number.
Bear Case
The bear case is about which assumption in the price is most fragile, and for a broker-dealer it is the durability of deal-driven fees. The price extrapolates fee-earnings growth near the top of the range for roughly eight years, and the firm's revenue is dominated by investment banking, advisory, and underwriting, all of which are recorded only when a transaction closes. Those fees are the most cyclical line in finance: they surge in an active M&A and financing market and evaporate in a frozen one. The Q1 2026 record, net revenue up 33% with corporate financing up 122%, is impressive, but it also resets the comparison base higher and makes the multi-year growth the price assumes harder to sustain. The single most fragile stream is the one carrying the print right now.
The cost structure compounds the cyclicality. Piper Sandler's filing describes the compensation machinery that keeps a deal franchise together: cash and equity awards with service conditions, restricted mutual-fund-share awards amortized over service periods, and forgivable loans amortized to compensation expense, all used to retain and recruit producers. The 10-K is candid that success depends on delivering competitive compensation and that the firm may be at a disadvantage to larger competitors given its size and financial resources. That is why Q1 net income was roughly flat despite a 33% revenue jump: compensation ate the gain. In a downturn, revenue falls faster than these committed comp costs can, so operating leverage works in reverse and earnings fall more than the top line.
Competition bounds the upside even in good markets. The filing states plainly that the industry is highly competitive and that revenues and profitability may suffer if the firm cannot compete on advice, reputation, price, execution, and financial resources. Against bulge-bracket banks and well-capitalized independents, a mid-cap advisory house wins on focus, not balance sheet. The price-to-earnings already sits at the top of the fee-financial group, and history is not reassuring on persistence: among fee firms growing earnings this fast, only about a fifth sustained that pace for the roughly eight years the price requires. The bet is not that Piper Sandler is a good firm, which it is, but that it stays in the rarest cohort of fee businesses for the better part of a decade.
Valuation
The right lens for Piper Sandler is price-to-earnings, not book value, because a capital-light fee business is worth the fee stream it generates rather than its balance sheet. At about $82 (June 27, 2026) the price is roughly 32 times earnings, a 3.1% earnings yield, which inverts to fee-earnings growth near the top of the achievable range sustained for about eight years, solved at an 11.9% cost of equity with growth searched up to a 20% ceiling. Each percentage point of cost of equity moves that implied horizon about 1.3 years, so the bet is primarily about duration: how long the firm keeps compounding fees at a fast pace, not whether it can hit the rate in any single year.
The method cross-section is unusually convergent for a name carrying a high implied assumption. The growth family, the DCF and two-stage dividend model, runs well above the price on the firm's historical growth, while the relative family lands near it (a blended P/E around 14.6 times, with the trailing multiple richer than the sector). The asset family is the anchor that matters here: residual income on a $18.84 book value and a 21% ROE produces a value near the quote, the Graham number sits just above the price, and the two-stage excess-return model converges in the same band. The earnings-power frame is the lone outlier that looks distorted, because normalized operating income for a broker-dealer does not map cleanly to an EBIT-based EPV, so it should be read as a model artifact rather than a signal.
The honest synthesis is that the price is demanding on duration but supported on level. The reconciliation is that the asset and earnings frames already reach the quote, so the price is not a leap of faith, it is a premium for a banking cycle staying favorable longer than the base rate of fee firms typically manages. The number is defensible if the cycle cooperates and stretched if the deal market cools, which is exactly the sensitivity a broker-dealer's valuation should carry.
Catalysts
The catalyst calendar runs on the deal cycle and the quarterly cadence. Piper Sandler reported a record Q1 2026 on May 1, 2026, with total revenues of $475.1 million versus $358.6 million a year earlier, investment banking of $348.2 million, advisory up 16% to $251.0 million, and corporate financing up 122% to $73.3 million led by healthcare. EPS was $0.92 and net income roughly flat at $65.2 million as compensation offset much of the revenue growth. The board raised the quarterly dividend 14% to $0.20 per share, a direct signal on management's confidence in the earnings run-rate, so the dividend trajectory is itself a forward indicator to watch alongside the next print.
The strategic watch items are the M&A pipeline and bolt-on expansion. Advisory revenues crossed $1 billion for the full prior year, up about 28%, and the broader M&A market has shown small but steady increases in deal volume and value with expectations for continued growth into 2026, which is the backdrop the price needs to hold. On the inorganic side, Piper Sandler closed the G Squared Capital Partners advisory acquisition in August 2025 and expected its MENA Growth Partners transaction to close in the first quarter of 2026, extending reach into the Middle East. Sell-side sentiment skews constructive, with a Buy-leaning consensus and price targets clustered in the mid-to-high $90s, well above the current quote, though coverage is thin enough that individual revisions move the average. The cleanest catalysts are a sustained banking-fee recovery and continued share gains in healthcare and financial-sponsor advisory; the clearest risk trigger is a stall in deal closings, since the firm books these fees only when transactions complete.
Peer Cohorts (Per Segment, With Filing Citations)
Investment banking & institutional brokerage (reported)
- PJT (PJT Partners Inc.)
- FY2025 10-K: …who are able to, and often do, provide financing or market making services that are often a crucial component of the types of transactions on which we advise. In addition to our larger competitors, over the last several years the growth of existing investment banks and the number of independent investment banks that…
- FY2025 10-K: …of factors, including the strength and depth of client relationships, industry knowledge, transaction execution skills, our range of products and services, innovation, reputation, our ability to offer a compelling career path and competitive rewards. Our continued success and ability to compete effectively depends on…
- HLI (Houlihan Lokey, Inc.)
- FY2025 10-K: …Contents Risks Related to our Industry We face strong competition from other financial advisory firms, many of which have the ability to offer clients a wider range of products and services than those we offer, which could cause us to lose engagements to competitors and subject us to pricing pressures that could…
- FY2025 10-K: …than we have. These larger and better capitalized competitors may be better able to respond to changes in the investment banking market, to compete for skilled professionals, to finance acquisitions, to fund internal growth and to compete for market share generally, which puts us at a competitive disadvantage and…
- BGC (BGC Group, Inc.)
- FY2025 10-K: …companies, market data and information vendors, securities and futures exchanges, electronic communications networks and trading platforms, crossing systems, software companies, financial trading consortia, as well as business-to-business marketplace infrastructure companies. We compete primarily with other…
- FY2025 10-K: …services in competition with those offered and expected to be offered by us. Consolidation and concentration of market share in the banking, brokerage, exchange and financial services industries could materially adversely affect our business, financial condition, results of operations and prospects because we may not…
- FRHC (FREEDOM HOLDING CORP.)
- FY2025 10-K: …real estate, technology, media and communications. In particular, in Kazakhstan many commercial banks are primarily focusing their financing activities on large or state-owned enterprises, and commercial lending sources impose loan structures and debt covenants that preclude many companies from obtaining such…
- FY2025 10-K: …with local practices. Part of our brokerage fees from customer trading consists of commissions we receive for from institutional market maker customers for execution of trades. Fees received for banking services consist primarily of commissions earned from merchants on acquiring operations, commission on transfer and…
- VIRT (Virtu Financial, Inc.)
- FY2025 10-K: …facilities. At December 31, 2025 and December 31, 2024, there were $ 2.4 million and $ 28.5 million, respectively, of short-term bank loans associated with international settlement activities outstanding under these facilities, at a weighted average interest rate of approximately 1.3 % and 5.0 %, respectively.…
- FY2025 10-K: , banks and broker dealers. We generally earn commissions when transacting as an agent for our clients. Within the Execution Services segment, we offer the following categories of products and services: • Agency-based, execution-only trading, done through a variety of access points including: ◦ algorithmic trading and…
- TW (Tradeweb Markets Inc.)
- FY2025 10-K: …with several market participants, which increasingly put their offerings in direct competition with Tradeweb. 22 Table of Contents • Inter-dealer brokers : We compete with inter-dealer brokers, particularly within our wholesale client sector in products such as MBS, U.S. Treasuries, U.S. repurchase agreements and…
- FY2025 10-K: …trading business from electronic voice processing clients in our rates and credit asset classes. In particular, across many of our products, we are implementing an integrated approach to grow our market share - serving institutional, wholesale and retail clients across all trade sizes, from odd-lot to block trades,…
- MKTX (MARKETAXESS HOLDINGS INC.)
- FY2025 10-K: …and may impair market liquidity. If bank-affiliated broker-dealers reduce their trading activity and that activity is not replaced by other market participants, the level of liquidity and pricing available on our trading platforms would be negatively impacted, which could adversely affect our operating results. In…
- FY2025 10-K: …new products and services by capitalizing on our competitive strengths, including: Deep and Differentiated Liquidity Pool Comprised of Leading Institutional Investors, Broker-Dealers and Other Market Participants Our electronic trading platforms provide access to a deep and differentiated liquidity pool comprised of…
- HOOD (Robinhood Markets Inc)
- FY2025 10-K: …and Robinhood Legend platforms. Brokerage (continued) Since 2024, we have offered most of our brokerage services to customers in the U.K. through RHUK via a dedicated mobile application available to eligible U.K. users. Brokerage services available to our U.K. customers include commission-free trading on U.S.-listed…
- FY2025 10-K: …subject us to investigations, penalties, and liability for customer losses if we fail to comply with applicable regulatory standards, and providing investment education tools could subject us to additional risks if such tools are construed to be investment advice or recommendations. Risks associated with providing…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.