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Why Is Artisan Partners (APAM) Down 3.6% Since Last Earnings Report?

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Zacks Equity Research
·3 min read
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A month has gone by since the last earnings report for Artisan Partners Asset Management (APAM). Shares have lost about 3.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Artisan Partners due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Artisan Partners Q4 Earnings Top Estimates, AUM Rises

Artisan Partners fourth-quarter 2020 adjusted earnings came in at $1.06 per share, surpassing the Zacks Consensus Estimate of $1.01. However, the bottom line was 41.3% lower than the year-ago quarter figure.

Results were supported by rise in revenues. Also, higher AUM and net inflows acted as tailwinds. However, higher expenses remained an undermining factor.

Net income available to common stockholders (GAAP basis) was $73.1 million or $1.15 per share, up from $44.5 million or 76 cents per share in the prior-year quarter.

In 2020, earnings of $3.40 per share beat the consensus estimate of $3.38 and rose 28.3% year over year. Net income available to common shareholders of $212.6 million increased 35.8% from 2019.

Revenues Climb, Expenses Increase

In 2020, total revenues climbed 12.6% year over year to $899.6 million. Also, the top line surpassed the consensus estimate of $896.5 million.

Revenues for the fourth quarter came in at $261.1 million, up 25.3% from the year-ago quarter. The rise primarily resulted from higher performance fees and AUM balance. Also, the top line surpassed the Zacks Consensus Estimate of $258 million.

Management fees earned from the Artisan Funds & Artisan Global Funds were up 24% year over year to $157 million. Management fees earned from Separate accounts increased 23% to $100.6 million.

Total expenses amounted to $147.6 million, up 14.4% year over year. The rise was largely due to higher employee compensation and benefits expenses.

Operating income was $11.6 million, up considerably from $4.3 million in the year-ago quarter.

AUM Increases on Net Inflows

As of Dec 31, 2020, AUM was $157.8 billion, up 30.4% from the year-earlier quarter. The company witnessed net inflows of $2.1 billion against outflows of $445 million a year ago.

Average AUM totaled $145 billion, up 25.2%.

Balance Sheet Position

Cash and other investments were $155 million compared with $134.6 million as of Dec 31, 2019. Also, the company’s debt leverage ratio, calculated in accordance with its loan agreements, was 0.5 as of Dec 31, 2020.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

Currently, Artisan Partners has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Artisan Partners has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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