A month has gone by since the last earnings report for Invesco (IVZ Quick QuoteIVZ - Free Report) . Shares have lost about 9.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Invesco due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Invesco Q4 Earnings Beat Estimates on Y/Y Revenue Increase

Invesco’s fourth-quarter 2024 adjusted earnings of 52 cents per share surpassed the Zacks Consensus Estimate of 49 cents. Moreover, the bottom line increased 10.6% from the prior-year quarter.

The results were primarily aided by a decline in adjusted expenses and higher adjusted net revenues. An increase in the AUM balance on decent inflows was a positive too.

Results in the reported quarter included certain notable items. After considering those, net income attributable to common shareholders was $209.3 million or 46 cents per share against a loss of $742.3 million or $1.64 per share in the year-ago quarter.

For 2024, adjusted earnings per share of $1.71 beat the consensus estimate of $1.68 and rose 13.2% year over year. Net income attributable to common shareholders (GAAP) was $538 million or $1.18 per share against a net loss of $333.7 million or 73 cents per share a year ago.

Adjusted Revenues Rise, Adjusted Expenses Decline

Adjusted net revenues in the quarter were $1.16 billion, up 10.6% year over year. The top line marginally beat the Zacks Consensus Estimate.

For 2024, net revenues were $4.40 billion, up 2.1% year over year. The top line matched the Zacks Consensus Estimate.

Adjusted operating expenses were $767.1 million, down marginally on a year-over-year basis.

The adjusted operating margin was 33.7%, up from 26.3% a year ago.

AUM Balance Increases

As of Dec. 31, 2024, AUM was $1.85 trillion, up 16.4% year over year. The average AUM at the end of the fourth quarter totaled $1.82 trillion, up 20.4%.

The company witnessed long-term net inflows of $25.6 billion in the reported quarter.

Strong Balance Sheet

As of Dec. 31, 2024, cash and cash equivalents were $986.5 million compared with $1.47 billion as of Dec. 31, 2023.

The long-term debt was $890.6 million.

Outlook

Management expects one-time implementation costs of Alpha to be $10-$15 million in each quarter of 2025. Further, costs related to Alpha (including both implementation costs and fees paid to platform providers) are expected to be $20-$25 million higher on a year-over-year basis.

Management expects 2025 total operating expenses to rise 1% on higher revenue levels.

Management expects the compensation-to-revenue ratio to be between 42% and 43% in 2025.

Non-GAAP effective tax rate is expected to be near 25% (higher end of the historical range of 23-25%) in the first quarter of 2025.

Management expects its total payout ratio to move closer to 60% in 2025.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

Currently, Invesco has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Invesco has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.