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Why Is SEI (SEIC) Up 4% Since Last Earnings Report?

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A month has gone by since the last earnings report for SEI Investments (SEIC - Free Report) . Shares have added about 4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is SEI due for a pullback? 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 catalysts.

SEI Investments Beats on Q3 Earnings, AUM Improves

SEI Investments’ third-quarter 2018 earnings of 80 cents per share surpassed the Zacks Consensus Estimate of 77 cents. Moreover, the figure grew 27% from the prior-year quarter.

An increase in total revenues, partly offset by higher operating expenses, aided the company’s results. Further, assets under management witnessed growth.

Net income was $128.3 million, increasing 26% from the year-ago period.

Revenues and AUM Improve, Expenses Rise

Total revenues were $408.7 million, increasing 6% year over year. The rise reflected an increase in asset management, administration and distribution fees as well as information processing and software servicing fees. However, the figure lagged the Zacks Consensus Estimate of $409.4 million.

Total expenses during the reported quarter were $296.3 million, increasing 3% year over year. The rise was mainly due to higher compensation, benefits and other personnel costs, consulting, outsourcing and professional fees, data processing and computer-related fees along with depreciation costs.

Operating income increased 13% year over year to $112.4 million.

As of Sep 30, 2018, AUM was $339.2 billion, reflecting an increase of 4% from the prior-year quarter. Total client AUM was $575.8 billion, increasing 12% year over year. Note that client AUM does not include $10.1 billion related to Funds of Funds assets that were reported on Sep 30, 2018.

Share Repurchase

In the reported quarter, SEI Investments bought back 1.7 million shares for $102.6 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, SEI has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

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

Outlook

SEI has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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