SEI (SEIC) Up 11.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for SEI Investments (SEIC). Shares have added about 11.9% 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 Q1 Earnings & Revenues Misses Estimates
SEI Investments’ first-quarter 2021 earnings of 89 cents per share missed the Zacks Consensus Estimate by a penny. However, the bottom line reflected 24% growth from the prior-year quarter.
Results were adversely impacted by rise in expenses. However, growth in revenues and an increase in AUM balance acted as tailwinds.
Net income was $129.5 million, up 19% from the year-ago quarter.
Revenues, Expenses & AUM Rise
Total revenues were $455.7 million, up 10% year over year. The upswing reflects an increase in asset management, administration and distribution fees, and information processing and software servicing fees. However, the top line marginally lagged the Zacks Consensus Estimate of $456 million.
Total expenses were $322.8 million, up 6% year over year. The rise was due to an increase in all cost components except for software royalties and other information processing costs.
Operating income rose 21% year over year to $132.8 million.
As of Mar 31, 2021, AUM was $383.7 billion, reflecting a surge of 35% from the prior-year quarter. Client assets under administration (AUA) were $836.2 billion, up 32%. Client AUA does not include $13.3 billion related to Funds of Funds assets that were reported on Mar 31, 2021.
Share Repurchase Update
In the reported quarter, SEI Investments bought back 1.2 million shares for $66.9 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, SEI has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, 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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