It has been about a month since the last earnings report for Affiliated Managers Group (AMG Quick QuoteAMG - Free Report) . Shares have added about 6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Affiliated Managers due for a pullback? 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.

Affiliated Managers Q2 Earnings Beat, Revenues & AUM Up

Affiliated Managers’ second-quarter 2021 economic earnings of $4.03 per share surpassed the Zacks Consensus Estimate of $3.82. The bottom line grew 47.1% year over year.

Results were aided by an improvement in revenues, growth in AUM balance and lower expenses. Further, the company had a robust liquidity position.

Economic net income was $171.2 million, up 32.1% from the prior-year quarter.

Revenues & AUM Improve, Expenses Decline

Total revenues improved 24.5% year over year to $586.3 million. However, the top line lagged the Zacks Consensus Estimate of $590.7 million.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $227.3 million, jumping 40.2% from the year-ago quarter.

Total expenses declined 4.8% year over year to $389.9 million. A drastic decline in intangible amortization and impairment costs primarily led to the fall.

As of Jun 30, 2021, total AUM was $755.7 billion, up 18.4% year over year. Net client cash outflows in the quarter were $8.1 billion.

Capital & Liquidity Position Decent

As of Jun 30, 2021, Affiliated Managers had $777.9 billion in cash and cash equivalents compared with $1.04 billion as of Dec 31, 2020. The company had $2.30 billion of debt, which declined marginally from the Dec 31, 2020 level.

Shareholders’ equity as of Jun 30, 2021, was $2.61 billion compared with $2.78 billion as of Dec 31, 2020.

Share Repurchase Update

In the reported quarter, the company repurchased shares worth nearly $80 million.

Third-Quarter 2021 Outlook

Management expects adjusted EBITDA of $215-$220 million based on the present AUM level.

Interest expenses are expected to be $28 million, suggesting a 3.7% rise from that reported in the prior quarter. Controlling interest depreciation is expected to remain at the second-quarter 2021 level of $2 million.

The company’s share of reported amortization and impairments is expected to be in line with the second-quarter level of $36 million. Intangible related deferred taxes are projected to be $12 million, down 61.3% from the second quarter.

Other economic items (excluding any mark-to-market impact) are anticipated to be $1 million.

Adjusted weighted average share count is estimated to be $42.1 million.

GAAP tax rate is expected to be 25%. Cash tax rate is expected to be 18%.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

At this time, Affiliated Managers has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile 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. It comes with little surprise Affiliated Managers has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.