SEI Investments Co’s (NASDAQ:SEIC) announced its latest earnings update in December 2017, which confirmed that the company gained from a robust tailwind, eventuating to a double-digit earnings growth of 21.14%. Below, I’ve laid out key growth figures on how market analysts perceive SEI Investments’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. View our latest analysis for SEI Investments
Market analysts’ consensus outlook for the upcoming year seems positive, with earnings expanding by a robust 30.21%. This growth seems to continue into the following year with rates arriving at double digit 39.96% compared to today’s earnings, and finally hitting US$621.85M by 2021.
Even though it’s informative understanding the growth rate each year relative to today’s figure, it may be more beneficial analyzing the rate at which the earnings are rising or falling every year, on average. The pro of this approach is that we can get a better picture of the direction of SEI Investments’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 11.49%. This means that, we can assume SEI Investments will grow its earnings by 11.49% every year for the next few years.
For SEI Investments, I’ve put together three pertinent aspects you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is SEIC worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SEIC is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SEIC? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.