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Earnings Miss: SEI Investments Company Missed EPS By 5.1% And Analysts Are Revising Their Forecasts

Simply Wall St
·4-min read

SEI Investments Company (NASDAQ:SEIC) shareholders are probably feeling a little disappointed, since its shares fell 6.6% to US$52.03 in the week after its latest third-quarter results. It looks like the results were a bit of a negative overall. While revenues of US$425m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.1% to hit US$0.75 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SEI Investments after the latest results.

Check out our latest analysis for SEI Investments

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earnings-and-revenue-growth

After the latest results, the seven analysts covering SEI Investments are now predicting revenues of US$1.78b in 2021. If met, this would reflect an okay 6.9% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to climb 11% to US$3.37. In the lead-up to this report, the analysts had been modelling revenues of US$1.78b and earnings per share (EPS) of US$3.43 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$62.40. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on SEI Investments, with the most bullish analyst valuing it at US$68.00 and the most bearish at US$56.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting SEI Investments' growth to accelerate, with the forecast 6.9% growth ranking favourably alongside historical growth of 5.2% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 6.0% per year. SEI Investments is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for SEI Investments going out to 2024, and you can see them free on our platform here.

Even so, be aware that SEI Investments is showing 1 warning sign in our investment analysis , you should know about...

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.