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Envestnet (ENV) Stock Down 4.9% Despite Q2 Earnings Beat

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Envestnet, Inc. (ENV - Free Report) stock has lost 4.9% since its second-quarter 2022 earnings release on Aug 4. The downfall can be attributed to a weak third-quarter and full year  guidance.

For third-quarter 2022, Envestnet expects adjusted earnings per share between 40 cents and 42 cents. The guided range lies below the current Zacks Consensus Estimate of 50 cents.

Envestnet, Inc Price, Consensus and EPS Surprise

Envestnet, Inc Price, Consensus and EPS Surprise

Envestnet, Inc price-consensus-eps-surprise-chart | Envestnet, Inc Quote

For 2022, Envestnet now expects adjusted EPS between $1.84 and $1.89 compared with the prior-guided range of $2.17-$2.23. The updated projection lies below the current Zacks Consensus Estimate of $2.03. Total revenues are now anticipated between $1.255 billion and $1.260 billion compared with the prior-guided range of $1.330-$1.340 billion.  

Adjusted earnings (excluding 91 cents from non-recurring items) per share of 49 cents outpaced the Zacks Consensus Estimate by 6.5% but declined 27% year over year. The reported figure lies above the guided range of 45-46 cents.

Revenues of $318.9 million missed the consensus mark by 1.9% but climbed 10.4% year over year. The reported figure lies above the guided range of $324-$326 million.

Quarterly Numbers in Detail

Adjusted revenues of $318.9 million jumped 10% year over year.

Asset-based recurring revenues of $192 million increased 12.9% year over year, contributing 60.2% to total revenues. Subscription-based recurring revenues of $118 million were up 4.8% from the prior-year quarter’s level, contributing 37% to total revenues. Professional services and other non-recurring revenues increased 42.2% year over year to $8.8 million.

Adjusted EBITDA came in at $57.1 million, down 20% year over year.

Envestnet ended second-quarter 2022 with a cash and cash equivalent balance of $338 million compared with $359.61 million at the end of the prior quarter. Long-term debt was $508.3 million compared with $850.09 million at the end of the prior quarter.

ENV generated $49.4 million of cash from operating activities. CapEx was $5.24 million.

Outlook

For the third quarter of 2022, total revenues are estimated between $301.5 million and $303.5 million. Envestnet expects adjusted EBITDA in the band of $51-$53 million.

For 2022, ENV now projects adjusted EBITDA of $223-$227 million compared with the prior-guided range of $255-$260 million.

Currently, Envestnet carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performances of Some Other Business Services Companies

Equifax (EFX - Free Report) reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.

EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.

IQVIA Holdings (IQV - Free Report) reported solid second-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.

Omnicom Group (OMC - Free Report) reported impressive second-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.
 


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