SEI Earnings: Sales Momentum Continues and Market Appreciation; Cash Program Boosting Revenue

SEI Investments reported a fairly good fourth quarter, in our view. Revenue grew 15% driven by average assets under management growing 18%. Importantly, net new recurring sales of $28 million were strong and suggest that the strength in the third quarter of 2024 may not be a blip. Even accounting for one-time items in the year-ago quarter, firmwide margins expanded amid market appreciation and expense control. The institutional investors segment continues to face headwinds. As we incorporate strong sales activity and market appreciation, we expect to increase our fair value estimate of $81 per share by a single-digit percentage and will maintain our narrow moat rating.