SEI Investments Co. (SEIC - Free Report) , with a strong global presence, as well as diversified products and services, remains well positioned for organic growth. Moreover, the company has been witnessing robust asset inflows, which is anticipated to boost profitability in the quarters ahead.
The company’s shares have gained 7.8% in the past 12 months against the industry’s decline of 0.1%.
However, escalating expenses will likely curb the company’s bottom-line growth. In addition, its high dependence on fee-based revenues remains a concern.
The company did not witness any earnings estimate revision for the current year over the past 30 days. Its Zacks Consensus Estimate has remained unchanged at $3.13. As a result, the stock currently carries a Zacks Rank #3 (Hold).
Looking at the fundamentals, SEI Investments’ revenues have increased at a CAGR of 9% over the last six years (2012-2017). Given the company’s sturdy global presence, diversified revenue mix and the acquisition of Archway Technology Partners, it remains on track to further improve top line in the near term.
Furthermore, the company has been witnessing rise in its assets under management and administration for the past several years. The same increased at a four-year (2014-2017) CAGR of 10.1%.
Further, SEI Investments has an efficient share repurchase and dividend payment policy in place. Supported by a solid capital position, it should continue enhancing shareholder value through efficient capital deployment activities.
However, elevated expenses remain a cause of concern for the company. Expenses flared up at a CAGR of 7.7% over the last six years (2012-2017). Moreover, expenses are expected to escalate further due to the company’s additional investment spending on services.
Furthermore, its dependence on fee-based revenues has been increasing for the last few years. A significant dependence on fee income as a source of revenues might adversely affect the company’s financials in the near term, as fluctuations in markets and foreign exchange translations or regulatory changes may hamper its AUM growth.
Mentioned below are a few stocks from the same space, which are worth considering as each of them currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the past 60 days, AllianceBernstein Holding L.P. (AB - Free Report) witnessed an upward earnings estimate revision of 2.4% for the current year. Its share price has increased 26.9% in the past year.
Ameriprise Financial, Inc.’s (AMP - Free Report) Zacks Consensus Estimate for the current year has been revised nearly 1.7% upward in the past 60 days. Its shares have gained 1.7% in the past 12 months.
Over the past 60 days, Lazard Ltd (LAZ - Free Report) has witnessed an upward earnings estimate revision of 2.5% for the current year. Its shares price has increased 12.2% in 12 months’ time.
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