SEI (SEIC) Down 2.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for SEI Investments (SEIC). Shares have lost about 2.6% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is SEI due for a breakout? 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 drivers.
SEI Investments Q2 Earnings Beat Estimates, Revenues Rise Y/Y
SEI Investments’ second-quarter 2023 earnings of 89 cents per share beat the Zacks Consensus Estimate of 85 cents. The bottom line reflects a rise of 10% from the prior-year quarter.
Results benefited from higher revenues and an increase in assets under management (AUM) balance. However, rising expenses acted as an undermining factor.
Net income was $118.9 million, up 7% from the year-ago quarter. Our estimate for the metric was $110.3 million.
Revenues & AUM Rise, Expenses Increase
Total revenues were $489.1 million, up 2% year over year. The rise was driven by higher asset management, administration and distribution fees, and information processing and software servicing fees. The top line surpassed the Zacks Consensus Estimate of $479.7 million.
Total expenses were $376.5 million, increasing 3%. The rise was due to higher compensation, benefits and other personnel costs; data processing and computer-related expenses; facilities, supplies and other costs; and depreciation costs. Our estimate for expenses was $364 million.
Operating income fell 3% year over year to $112.6 million.
As of Jun 30, 2023, AUM was $418 billion, reflecting a rise of 4%. Our estimate for AUM was $402 billion.
Client assets under administration (AUA) were $877.7 billion, down 3%. Client AUA did not include $11.7 billion related to Funds of Funds assets reported on Jun 30, 2023.
Share Repurchase Update
In the reported quarter, SEI Investments bought back 1.3 million shares for $75.5 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, SEI has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise SEI has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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SEI Investments Company (SEIC) : Free Stock Analysis Report
