Company Reports

SEI Investments reported a decent start to 2024. Market appreciation helped boost revenue, which grew 9% in the first quarter to $512 million. Similar to trends seen in recent quarters, the investment managers segment continued to perform well while the institutional investors segment struggled. The investor advisors segment benefited from its cash sweep program, and the private banks segment is showing signs of margin improvement. Overall, there was little in SEI’s earnings release that would alter our long-term view of the firm. We will maintain our narrow moat rating and $70 fair value estimate.

SEI Investments consists of four main segments: private banks, investment advisors, institutional investors, and investment managers. A minority interest in value equity manager LSV Asset Management generates about 20% of its pretax income. The firm’s investment advisors, institutional investors, and investment managers segments have been strong drivers of earnings and have strong operating margins, while private banks has been a thorn in SEI’s side, with disappointing revenue growth and operating margins.

Boosted by market appreciation, narrow-moat SEI reported a decent finish to the end 2023. Revenue of $485 million and EPS of $0.91 compare with the FactSet consensus estimate of $483 million and $0.93, respectively. We attribute the EPS miss to $11 million in one-time charges—an asset write-off and severance charges—which, by our calculations make a negative impact on EPS of $0.07. As we’ve seen in previous quarters, the firm’s investment managers segment continues to be its fastest grower with 12% growth, while net new recurring sales of $15 million were healthy, in our view. The firm’s private banks margin showed improvement and trends were mixed in the advisors segment. The institutional investors segment continues to be weak. As we incorporate fourth-quarter financial results, we expect to increase our fair value estimate of $66 by a single-digit percentage due primarily to market appreciation and the time value of money.

Narrow-moat SEI Investments reported a mixed third quarter. Revenue of $477 million fell shy of the FactSet consensus of $483 million while EPS of $0.87 was in line. Similar to what we've seen in the last several quarters, the firm's fund administration unit, referred to as investment managers, continues to outshine the firm's other segments, which face various headwinds. As we update our model, we are reducing our fair value estimate to $66 from $69 to account for some market headwinds because our last update and weakness in the firm's institutional investors segment.

SEI Investments consists of four main segments: private banks, investment advisors, institutional investors, and investment managers. A minority interest in value equity manager LSV Asset Management generates about 20% of its pretax income. The firm’s investment advisors, institutional investors, and investment managers segments have been strong drivers of earnings and have strong operating margins, while private banks has been a thorn in SEI’s side, with disappointing revenue growth and operating margins.

SEI Investments reported an okay second quarter, in our view. Revenue of $489 million and EPS of $0.89 were optically above the FactSet consensus estimates of $479 million and $0.83, respectively. However, private banks segment revenue benefited from a $10.5-million early buyout fee and the institutional investors segment saw elevated expenses of $4.5 million. Excluding these items, revenue and EPS would have been in line with consensus, by our calculations. As we’ve seen in previous quarters, SEI’s investment managers segment continues to perform well and formed the bulk of the firm’s net new recurring sales, which we think were solid. However, the firm’s other segments continue to face challenges. Overall, we will maintain our narrow moat rating and fair value estimate of $69 on SEI’s shares.

SEI Investments consists of four main segments: private banks, investment advisors, institutional investors, and investment managers. A minority interest in value equity manager LSV Asset Management generates about 20% of its pretax income. The firm’s investment advisors, institutional investors, and investment managers segments have been strong drivers of earnings and have strong operating margins, while private banks has been a thorn in SEI’s side, with disappointing revenue growth and operating margins.

SEI Investments reported a mixed first quarter. Excluding one-time items, revenue declined 5% to $469 million, in line with FactSet consensus, while EPS of $0.79 came in $0.03 below consensus. The private banks segment showed modest progress on the operating margin front, but lower asset-based fees weighed on margins for SEI’s higher-margin segments such as investment advisors and institutional investors. Firmwide, SEI’s operating margin of 21.7% improved from 20.6% in the prior quarter but was below the 26.1% (excluding a one-time large termination fee) in the year-ago period. SEI is unique among peers with no net debt and over $6 of cash per share, and it appears to be looking at potential acquisitions more aggressively. We are maintaining our $67 fair value estimate and narrow moat rating.

SEI Investments finished 2022 with a mixed quarter. With about three-quarters of its revenue tied to asset levels, revenue declined 9% to $457 million, which was roughly in line with the FactSet consensus estimate of $456 million. As only a fraction of SEI’s costs are asset-based, the decline in revenue resulted in operating margins declining to 20.6% from 28.6% in the year-ago period. Operating margins declined in each of SEI’s four main segments. Overall, there was little that would alter our long-term view of the firm and we will maintain our narrow moat rating and $67 fair value estimate for the firm’s shares.

SEI Investments consists of four main segments: private banks, investment advisors, institutional investors, and investment managers. A minority interest in value equity manager LSV Asset Management generates about 20% of its pretax income. The firm’s investment advisors, institutional investors, and investment managers segments have been strong drivers of earnings and have strong operating margins, while private banks has been a thorn in SEI’s side, with disappointing revenue growth and operating margins.

SEI Investments consists of four main segments: private banks, investment advisors, institutional investors, and investment managers. A minority interest in value equity manager LSV Asset Management generates about 20% of its pretax income. The firm’s investment advisors, institutional investors, and investment managers segments have been strong drivers of earnings and have strong operating margins, while private banks has been a thorn in SEI’s side, with disappointing revenue growth and operating margins.

Narrow-moat-rated SEI Investments reported a decent third quarter. Revenue of $471 million was down 2% sequentially, not a bad result considering market movements. As expected, the investment managers segment continues to be SEI Investments' strongest performer, and this segment makes up most of its net new recurring sales events. Overall, we expect to lower our fair value estimate on SEI Investments by a single-digit percentage as we account for lower asset-based fees due to market movements since we last updated our model in August.

SEI Investments consists of four main segments: private banks, investment advisors, institutional investors, and investment managers. A minority interest in value equity manager LSV Asset Management generates about 20% of its pretax income. The firm’s investment advisors, institutional investors, and investment managers segments have been strong drivers of earnings and have strong operating margins, while private banks has been a thorn in SEI’s side, with disappointing revenue growth and operating margins.

SEI Investments reported decent second-quarter financial results. Revenue came in at $482 million, a 2% sequential decline excluding the impact of termination fees as markets moved further south. This is a good result in our view given the market declines and we note that this revenue beat the FactSet consensus by 2%. On this $482 million of revenue, SEI generated operating margin of 24%, down sequentially and year over year amid SEI’s revenue model of asset-based fees and mostly fixed expense structure. We will maintain our narrow moat rating and fair value estimate of $71.

SEI Investments consists of four main segments: private banks, investment advisors, institutional investors, and investment managers. A minority interest in value equity manager LSV Asset Management generates about 20% of its pretax income. The firm’s investment advisors, institutional investors, and investment managers segments have been strong drivers of earnings and have strong operating margins, while private banks has been a thorn in SEI’s side, with disappointing revenue growth and operating margins.

SEI Investments started 2022 with a decent but not great first quarter. SEI reported first-quarter revenue of $581 million and EPS of $1.36 which compares with the FactSet consensus of $579 million and $1.44, respectively. The first quarter includes a one-time cancellation fee of $88 million, so as a result, we view SEI’s operating revenue and EPS as $493 million and $0.89, respectively. We will maintain our narrow moat rating and $74 fair value estimate on SEI’s shares.

SEI Investments consists of four main segments: private banks, investment advisors, institutional investors, and investment managers. A minority interest in value equity manager LSV Asset Management generates about 20% of its pretax income. The firm’s investment advisors, institutional investors, and investment managers segments have been strong drivers of earnings and have strong operating margins, while private banks has been a thorn in SEI’s side, with disappointing revenue growth and operating margins.

SEI Investments consists of four main segments: private banks, investment advisors, institutional investors, and investment managers. A minority interest in value equity manager LSV Asset Management generates about 20% of its pretax income. The firm’s investment advisors, institutional investors, and investment managers segments have been strong drivers of earnings and have strong operating margins, while private banks has been a thorn in SEI’s side, with disappointing revenue growth and operating margins.

SEI finished off 2021 with a decent quarter. SEI reported revenue of $501 million, beating consensus' estimate by $13 million but about half of the beat was optics in our view as SEI recorded $6.8 million in early termination fees. Overall, there was little in SEI’s fourth-quarter earnings release that would alter our long-term view of the firm and we will maintain our narrow moat rating and $71 fair value estimate.

In our view, SEI Investments' third-quarter results were generally good but not without some headwinds. Revenue came in at $485.3 million, up 14% on the back of market appreciation and was modestly ahead of the FactSet consensus of $482.3 million. Likewise, earnings per share of $0.97 was $0.02 above the consensus estimate. Overall, we will maintain our fair value estimate of $71 and narrow moat rating.