What is APO's Intrinsic value?

Apollo Global Management Inc (APO) Intrinsic Value Analysis

Executive Summary

As of August 2, 2025, Apollo Global Management Inc's estimated intrinsic value ranges from $83.90 to $148.59 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $148.59 +7.5%
Dividend Discount Model (Stable) $83.90 -39.3%

Is Apollo Global Management Inc (APO) undervalued or overvalued?

With the current market price at $138.29, the stock appears to be moderately overvalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Apollo Global Management Inc's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.76 1.35
Cost of equity 7.4% 12.4%
Cost of debt 5.0% 5.0%
Tax rate 15.1% 16.0%
Debt/Equity ratio 0.17 0.17
After-tax WACC 6.9% 11.2%

Valuation Methods

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 33.6%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 9.9%
  • Long-term growth rate: 2.0%
  • Fair value: $148.59 (7.5% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 12.4% (Low) to 7.4% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $39 to $129
  • Selected fair value: $83.90 (-39.3% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $79031M
Enterprise Value $79376M
Trailing P/E 22.00
Forward P/E 14.52
Trailing EV/EBITDA 0.00
Current Dividend Yield 152.85%
Dividend Growth Rate (5Y) 19.34%
Debt-to-Equity Ratio 0.17

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Dividend Discount Model (Multi-Stage) 57% $29.72
Dividend Discount Model (Stable) 43% $12.58
Weighted Average 100% $120.87

Investment Conclusion

Based on our comprehensive valuation analysis, Apollo Global Management Inc's intrinsic value is $120.87, which is approximately 12.6% below the current market price of $138.29.

Key investment considerations:

  • Conservative capital structure (Debt/Equity of 0.17)
  • Historical dividend growth of 19.34%

Given these factors, we believe Apollo Global Management Inc is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.