Envestnet (ENV) Rides on Strong Revenue Generation Capacity
Envestnet, Inc. ENV is currently benefiting from a strong asset-based and subscription-based recurring revenue generation capacity.
The company recently reported impressive fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. EPS came in at 65 cents, surpassing the consensus estimate by 22.6% and increasing 44.4% year over year. Total revenues of $317.6 million beat the consensus estimate by 1.7% and improved 8.5% year over year.
How is Envestnet Doing?
Envestnet’s business model ensures solid asset-based and subscription-based recurring revenue generation capacity. The company provides asset-based and subscription-based services on a business-to-business-to-consumer basis to financial services clients. These clients offer solutions based on Envestnet’s platform to their end users.
On a business-to-business basis, the company delivers an open platform to customers and third-party developers through an open API framework. Envestnet’s recurring revenues increased 2.1%, 4.5% and 20.2% year over year in 2023, 2022 and 2021, respectively.
The company’s technology-enabled services are expected to register handsome growth as trends such as increasing demand for personalized wealth management services and cost-effective guided advice are creating significant market opportunities.
Envestnet continues to focus on technology development to improve operational efficiency, increase market competitiveness, address regulatory demands and cater to client-driven requests for new capabilities. The company’s technology design facilitates significant scalability.
Some Risks
Envestnet never declared and currently does not have any plan to pay cash dividends on common stock. So, the only way to achieve a return on investment on the company’s stock is share price appreciation, which is not guaranteed. Investors seeking cash dividends should avoid buying Envestnet’s shares.
The company belongs to the Zacks Financial Transaction Services industry. Here’s how a couple of stocks from the same space performed this earnings season:
Equifax EFX reported better-than-expected fourth-quarter 2023 results. Adjusted earnings came in at $1.81 per share, beating the Zacks Consensus Estimate by 4% and increasing 19.1% from the year-ago figure.
EFX’s revenues of $1.33 billion beat the consensus estimate by 1.1% and increased 10.7% from the year-ago figure on a reported basis and 14% on a local currency basis.
Green Dot Corporation GDOT reported mixed fourth-quarter 2023 results, with earnings missing the Zacks Consensus Estimate but revenues surpassing the same.
GDOT’s earnings per share of 14 cents missed the consensus estimate by 17.7% and declined 58.8% on a year-over-year basis. Revenues of $361.7 million outpaced the Zacks Consensus Estimate by 3.3% and improved 5.6% year over year.
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Equifax, Inc. (EFX) : Free Stock Analysis Report
Green Dot Corporation (GDOT) : Free Stock Analysis Report
Envestnet, Inc (ENV) : Free Stock Analysis Report
