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Envestnet Inc ENV

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Solid Quarter and Revenue Outlook for Envestnet, but We Lower FVE on Elevated Expense Outlook

Rajiv Bhatia, CFA Equity Analyst

Analyst Note

| Rajiv Bhatia, CFA |

Narrow-moat-rated Envestnet reported solid fourth-quarter results and 2021 revenue outlook, but we suspect investment spending will disappoint investors in the near term. Revenue outlook for 2021 of $1.105 billion-$1.120 billion was in line with the FactSet consensus of $1.111 billion, but as the company ramps up investment spending, adjusted EBITDA margins are expected to decline to 20.7% from the 24.3% in 2020 and the 21.4% in 2019. As a result, Envestnet’s 2021 adjusted EPS outlook of $1.95 to $2.08 missed the consensus estimate of $2.71. We are lowering our fair value estimate on Envestnet's shares to $65 from $74 to account for higher expenses in our model.

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Company Profile

Business Description

Envestnet Inc provides wealth-management technology and solutions to registered investment advisors, banks, broker/dealers, and other firms. Its Tamarac platform provides trading, rebalancing, portfolio accounting, performance reporting, and client relationship management software to high-end RIAs. Envestnet's portfolio management consultants provides research services and consulting services to assist advisors, including vetted third-party managed account products. In November 2015, Envestnet acquired Yodlee, a provider of data aggregation.

35 East Wacker Drive, Suite 2400, 24th Floor
Chicago, IL, 60601
T +1 312 827-2800
Sector Technology
Industry Software - Application
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Speculative Growth
Employees 4,250