Apollo Global Management scores 73 for management and 83 for moat. The management score rests on a return on invested capital of 5.2% and a gross margin of 95.5% — figures that describe a business earning a respectable return on what it employs. Debt sits at 0.57x equity. The wide moat and strong management are not the same judgement, and the gap between them is where the argument about this business sits.
Three independent anchors set the price worth paying. Growth is modelled at 15.0% a year, below the 69.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 25.9x. That produces an intrinsic value of $115.96, a 10-CAP price of $130.93 and a payback time price of $206.69, with the value zone set at the highest of the three, $206.69. Today's price of $114.34 sits inside that zone.
A business scoring this well, trading inside its value zone, is the combination the framework exists to find — which is also the reason to check why the market disagrees. A margin of safety score of 51 describes the cushion, not the certainty.
| Price | $114.34 |
| Market cap | $65.9B |
| P/E ratio | 25.6x |
| Return on invested capital | 5.2% |
| Gross margin | 95.5% |
| Debt to equity | 0.57x |
| Free cash flow yield | 8.5% |
| Growth rate used | 15.0% |
| Growth rate measured | 69.0% |
| Exit multiple assumed | 25.9x |
| Company | Moat | Buy price |
| KKR & Co. Inc. (KKR) | 48 | $47.70 |
| Ameriprise Financial (AMP) | 94 | $1,072.24 |
| Ares Management Corporation (ARES) | 81 | $59.92 |
| Northern Trust (NTRS) | 64 | $97.31 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Apollo Global Management rather than accepting ours.