Apollo Global Management's (APO) Q4 adjusted net income beat expectations, driven roughly equally by stronger-than-expected performance income and a favorable tax rate, Oppenheimer said in a Tuesday note.

The brokerage noted that fee-related earnings of $1.11 per share were slightly below Oppenheimer's forecast due to higher operating costs, while base management fees were in line with expectations.

Spread-related earnings of $865 million modestly exceeded Oppenheimer's estimate and were roughly flat quarter over quarter. Apollo's $24 billion cash and Treasury buffer weighed on near-term earnings but positions the company to capitalize on potential market dislocations.

Oppenheimer highlighted that fee-related earnings and carry continue to grow their share of total earnings, with fee-related earnings up 21.4% year over year and 23.3% for the quarter.

The brokerage highlighted 20% year-over-year growth in assets under management excluding the Bridge acquisition. The firm also highlighted strategic opportunities, including Apollo's about $6 billion sports capital fund, which could drive future origination and fee income.

Oppenheimer views Apollo as only moderately undervalued relative to peers and has a perform rating on the stock.

Price: 133.29, Change: -0.66, Percent Change: -0.49