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It has been about a month since the last earnings report for Artisan Partners Asset Management (APAM). Shares have added about 7.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Artisan Partners 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.
Artisan Partners Q1 Earnings Meet Estimates, AUM Falls
Artisan Partners’ first-quarter 2022 adjusted net income per adjusted share was 98 cents, meeting the Zacks Consensus Estimate. The bottom line declined from $1.13 in the year-ago quarter.
While management fees earned from Separate accounts supported revenues, performance revenue declines weighed on the overall top line. Lower AUM and an increase in expenses were undermining factors.
Net income attributable to Artisan Partners was $65.4 million, down from $77.3 million in the prior year.
Revenues Fall, Expenses Increase
First-quarter revenues were $281.6 million, down 3% from the year-ago quarter. The fall primarily resulted from a decrease in performance fee revenues. The top line missed the Zacks Consensus Estimate of $286.7 million.
Management fees earned from the Artisan Funds & Artisan Global Funds fell 0.7% year over year to $175.5 million. Management fees earned from Separate accounts grew 1.3% to $105.9 million.
Total operating expenses amounted to $174.6 million, up 34% year over year. The rise was primarily due to higher occupancy, and general and administrative expenses.
The operating income was $107 million, down 12.2% year over year.
As of Mar 31, 2022, the ending AUM was $159.6 billion, down 9% from the earlier quarter due to global market declines.
The average AUM totaled $162.2 billion, down 8% from the prior quarter.
Balance Sheet Position Deteriorates
Cash and cash equivalents were $187.5 million compared with $189.2 million as of Dec 31, 2021. The company’s debt leverage ratio, calculated in accordance with its loan agreements, was 0.3 as of Mar 31, 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -9.09% due to these changes.
At this time, Artisan Partners has a strong Growth Score of A, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Artisan Partners has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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