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Why You Should Hold Envestnet (ENV) Stock in Your Portfolio Now

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Envestnet, Inc. (ENV - Free Report) is currently being aided by its recurring revenue-generation capacity and development in technology.

ENV’s 2022 and 2023 revenues are anticipated to grow 4.7% and 4.3%, respectively, from the year-ago reported figures. Shares of ENV have gained 10.5% in the past six months compared with the 3% increase of the industry it belongs to.

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Factors That Augur Well

Envestnet’s business model ensures solid asset-based and subscription-based recurring revenue-generation capacity. ENV provides asset-based and subscription-based services on a business-to-business-to-consumer (B2B2C) basis to financial services clients. These clients offer solutions based on ENV’s platform to their end users.

Envestnet continues focusing on technological upgrades to improve operational efficiency, increase market competitiveness, address regulatory demands and cater to client-driven requests for new capabilities. Currently, ENV’s technology platforms are based on a three-tier architecture combining a web-based user interface, an application tier housing the business logic for all the platforms’ functionality and an SQL Server database. Management believes that ENV’s technology-based designs allow significant scalability.

A Key Risk

Envestnet's current ratio at the end of the September quarter was 0.64, lower than the current ratio of 0.77 reported at the end of the June quarter and the prior-year quarter’s current ratio of 2.04. A decreasing current ratio is undesirable as it indicates a company’s inefficiency in meeting its short-term debt obligations.

Zacks Rank and Stocks to Consider

Envestnet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector are Booz Allen Hamilton Holding Corporation (BAH - Free Report) and CRA International, Inc. (CRAI - Free Report) .

Booz Allen carries a Zacks Rank #2 (Buy), presently. BAH has a long-term earnings growth expectation of 8.9%.

Booz Allen delivered a trailing four-quarter earnings surprise of 8.8%, on average.

CRA International carries a Zacks Rank of 2 at present. CRAI has a long-term earnings growth expectation of 14.3%.

CRA International delivered a trailing four-quarter earnings surprise of 25.7%, on average.
 


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