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Why Is Artisan Partners (APAM) Down 8.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for Artisan Partners Asset Management (APAM - Free Report) . Shares have lost about 8.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Artisan Partners 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.
Artisan Partners’ fourth-quarter 2021 adjusted net income per adjusted share was $1.29, surpassing the Zacks Consensus Estimate of $1.25. The bottom line soared from $1.06 in the year-ago quarter.
Results were supported by a rise in revenues and higher AUM. However, an increase in expenses was an undermining factor.
Net income attributable to Artisan Partners (GAAP basis) was $84.6 million, up from $73.1 million.
In 2021, adjusted net income per adjusted share of $5.03 beat the consensus estimate of $4.99 and rose 51% year over year. Net income available to common shareholders of $336.5 million increased from $212.6 million in 2020.
Revenues Climb, Expenses Increase
In 2021, total revenues climbed 36.4% year over year to $1.23 billion. Also, the top line met the consensus estimate of $1.23 billion.
Fourth-quarter revenues were $315 million, rising 20.6% from the year-ago quarter. The rise primarily resulted from a higher average AUM balance. The top line surpassed the Zacks Consensus Estimate of $313.4 million.
Management fees earned from the Artisan Funds & Artisan Global Funds rose 25% year over year to $196.9 million. Management fees earned from Separate accounts grew 15.3% to $116 million.
Total operating expenses amounted to $177.2 million, up 20% year over year. The rise was primarily due to higher incentive compensation, compensation and benefits, and travel expenses.
The operating income was $137.8 million, up 21.4% year over year.
AUM Increases on Net Inflow
As of Dec 31, 2021, ending AUM was $174.8 billion, up 10.8% from the year-earlier quarter. The company witnessed net client cash inflows of $1.7 billion and $17.6 billion of investment returns in the fourth quarter.
The average AUM totaled $175.9 billion, up 40.8% year over year.
Balance Sheet Position Strong
Cash and cash equivalents were $189.2 million compared with $155 million as of Dec 31, 2020. The company’s debt leverage ratio, calculated in accordance with its loan agreements, was 0.3 as of Dec 31, 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Artisan Partners has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Artisan Partners has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Artisan Partners (APAM) Down 8.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Artisan Partners Asset Management (APAM - Free Report) . Shares have lost about 8.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Artisan Partners 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.
Artisan Partners’ Q4 Earnings Beat Estimates, AUM Rises
Artisan Partners’ fourth-quarter 2021 adjusted net income per adjusted share was $1.29, surpassing the Zacks Consensus Estimate of $1.25. The bottom line soared from $1.06 in the year-ago quarter.
Results were supported by a rise in revenues and higher AUM. However, an increase in expenses was an undermining factor.
Net income attributable to Artisan Partners (GAAP basis) was $84.6 million, up from $73.1 million.
In 2021, adjusted net income per adjusted share of $5.03 beat the consensus estimate of $4.99 and rose 51% year over year. Net income available to common shareholders of $336.5 million increased from $212.6 million in 2020.
Revenues Climb, Expenses Increase
In 2021, total revenues climbed 36.4% year over year to $1.23 billion. Also, the top line met the consensus estimate of $1.23 billion.
Fourth-quarter revenues were $315 million, rising 20.6% from the year-ago quarter. The rise primarily resulted from a higher average AUM balance. The top line surpassed the Zacks Consensus Estimate of $313.4 million.
Management fees earned from the Artisan Funds & Artisan Global Funds rose 25% year over year to $196.9 million. Management fees earned from Separate accounts grew 15.3% to $116 million.
Total operating expenses amounted to $177.2 million, up 20% year over year. The rise was primarily due to higher incentive compensation, compensation and benefits, and travel expenses.
The operating income was $137.8 million, up 21.4% year over year.
AUM Increases on Net Inflow
As of Dec 31, 2021, ending AUM was $174.8 billion, up 10.8% from the year-earlier quarter. The company witnessed net client cash inflows of $1.7 billion and $17.6 billion of investment returns in the fourth quarter.
The average AUM totaled $175.9 billion, up 40.8% year over year.
Balance Sheet Position Strong
Cash and cash equivalents were $189.2 million compared with $155 million as of Dec 31, 2020. The company’s debt leverage ratio, calculated in accordance with its loan agreements, was 0.3 as of Dec 31, 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Artisan Partners has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Artisan Partners has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.