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Here's Why You Should Hold on to Envestnet (ENV) Stock for Now

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Zacks Equity Research
·3 min read
In this article:
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  • ENV
  • CCRN

Envestnet, Inc. ENV has an impressive Growth Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth. Envestnet’s revenues are expected to register 11.3% growth in 2022 and 14% in 2023.

Factors That Bode Well

Envestnet’s business model ensures solid asset-based and subscription-based recurring revenue generation capacity. Asset-based recurring revenues of $202.7 million increased 27%, and subscription-based recurring revenues of $114.7 million were up 4% year over year in the first quarter of 2022.

Envestnet, Inc Revenue (TTM)

Envestnet, Inc Revenue (TTM)
Envestnet, Inc Revenue (TTM)

Envestnet, Inc revenue-ttm | Envestnet, Inc Quote

The company’s technology-enabled services are expected to register handsome growth as trends such as increasing demand for personalized wealth management services and guided advice in a cost-effective manner 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.

Debt Woe Stays

Envestnet's current ratio at the end of March-quarter was 1.83, lower than the current ratio of 1.97 reported at the end of the September quarter and the prior-year quarter figure of 2.14. Decreasing current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.

Envestnet's cash and cash equivalent balance of $360 million at the end of the quarter was well below the long-term debt level of $850 million. This underscores that the company doesn’t have enough cash to meet this debt burden.

The stock declined 9.8% over the past year compared with a 35.6% fall of the industry it belongs to.

Envestnet, Inc Price

Envestnet, Inc Price
Envestnet, Inc Price

Envestnet, Inc price | Envestnet, Inc Quote

Zacks Rank and Stocks to Consider

Envestnet currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks the broader Business Services sector that investors can consider are Cross Country Healthcare CCRN and Gartner IT, each sporting a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here.

Cross Country Healthcare has an expected earnings growth rate of 54.3% for the current year. It delivered a trailing four-quarter earnings surprise of 29.2%, on average.

CCRN has a long-term earnings growth rate of 6.9%. Shares have soared 13.4% in the past year.

Gartner’s shares have jumped 8% in the past year. The company delivered a trailing four-quarter earnings surprise of 24.2%, on average.

The Zacks Consensus Estimate for IT’s earnings in the current year has moved up 8.6% in the past 30 days.


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