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Why Is Envestnet (ENV) Down 3.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Envestnet (ENV - Free Report) . Shares have lost about 3.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Envestnet due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Envestnet Beats on Q3 Earnings and Revenues
Envestnet reported better-than-expected third-quarter 2020 results. Adjusted earnings (excluding 69 cents from non-recurring items) per share of 72 cents outpaced the Zacks Consensus Estimate as well as the year-ago quarter’s reported figure by 20%. Revenues of $252.6 million surpassed the consensus mark by 2.5% and climbed 7% year over year.
Quarterly Numbers in Detail
Adjusted revenues of $252.7 million jumped 6% year over year. Adjusted net revenues grew 4% to $181.5 million.
Asset-based recurring revenues of $137.7 million increased 8.8% year over year, contributing 56.1% to total revenues. Subscription-based recurring revenues of $107.89 million were up 7.3% from the prior-year quarter’s levels, contributing 43.9% to total revenues. Professional services and other non-recurring revenues declined 22.3% year over year to $6.9 million.
Envestnet ended the third quarter with cash and cash equivalent balance of $362.9 million compared with $92.2 million at the end of the prior quarter. The company generated around $85.1 million of cash from operating activities. CapEx was $4.5 million.
Raised Q4 & 2020 Outlook
For fourth-quarter 2020, Envestnet expects adjusted earnings to be 64 cents per share (previous guidance: 59 cents per share). Total revenues are estimated between $255.5 million and $257.5 million (previous guidance: $244.5 million and $246 million).
Adjusted net revenues are projected in the range of$181-$183.5 million (previous guidance: $174.5-$176.5 million). The company expects adjusted EBITDA in the band of $60-$61 million (previous guidance: $56 million to $57 million).
For 2020, adjusted EPS is now expected in the range of $2.51-$2.53 compared with the prior-guided range of $2.28 and $2.31. Total revenues are now anticipated between $990.5 million and $992.5 million compared with the prior guidance of $977-$980million.
Adjusted net revenues are now projected in the range of $714.4-$716.9 million compared with the prior guidance of $704.5-$708.5 million. The company now projects adjusted EBITDA of $238-$239 million compared with the prior guidance of $221-$223 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 11.47% due to these changes.
VGM Scores
Currently, Envestnet has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Envestnet has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Envestnet (ENV) Down 3.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Envestnet (ENV - Free Report) . Shares have lost about 3.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Envestnet due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Envestnet Beats on Q3 Earnings and Revenues
Envestnet reported better-than-expected third-quarter 2020 results. Adjusted earnings (excluding 69 cents from non-recurring items) per share of 72 cents outpaced the Zacks Consensus Estimate as well as the year-ago quarter’s reported figure by 20%. Revenues of $252.6 million surpassed the consensus mark by 2.5% and climbed 7% year over year.
Quarterly Numbers in Detail
Adjusted revenues of $252.7 million jumped 6% year over year. Adjusted net revenues grew 4% to $181.5 million.
Asset-based recurring revenues of $137.7 million increased 8.8% year over year, contributing 56.1% to total revenues. Subscription-based recurring revenues of $107.89 million were up 7.3% from the prior-year quarter’s levels, contributing 43.9% to total revenues. Professional services and other non-recurring revenues declined 22.3% year over year to $6.9 million.
Envestnet ended the third quarter with cash and cash equivalent balance of $362.9 million compared with $92.2 million at the end of the prior quarter. The company generated around $85.1 million of cash from operating activities. CapEx was $4.5 million.
Raised Q4 & 2020 Outlook
For fourth-quarter 2020, Envestnet expects adjusted earnings to be 64 cents per share (previous guidance: 59 cents per share). Total revenues are estimated between $255.5 million and $257.5 million (previous guidance: $244.5 million and $246 million).
Adjusted net revenues are projected in the range of$181-$183.5 million (previous guidance: $174.5-$176.5 million). The company expects adjusted EBITDA in the band of $60-$61 million (previous guidance: $56 million to $57 million).
For 2020, adjusted EPS is now expected in the range of $2.51-$2.53 compared with the prior-guided range of $2.28 and $2.31. Total revenues are now anticipated between $990.5 million and $992.5 million compared with the prior guidance of $977-$980million.
Adjusted net revenues are now projected in the range of $714.4-$716.9 million compared with the prior guidance of $704.5-$708.5 million. The company now projects adjusted EBITDA of $238-$239 million compared with the prior guidance of $221-$223 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 11.47% due to these changes.
VGM Scores
Currently, Envestnet has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Envestnet has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.