Envestnet Touches 52-Week High on Impressive Q3 Results - Analyst Blog

On Nov 17, 2014 shares of Envestnet, Inc. (ENV) scaled a 52-week high of $55.02 buoyed by a comfortable third-quarter earnings beat. With about 0.2 billion shares exchanging hands in the last trading session, shares closed at $52.83.

The year-to-date return from the stock came in at 31.1%, which was ahead of the S&P's return of 10.1%. With respect to earnings performance, this financial transaction service provider delivered positive surprises in two of the last four quarters with an average beat of 7.82%.

In the third quarter, Envestnet posted earnings of 17 cents per share that surpassed the Zacks Consensus Estimate by 21.43% and improved nearly 55% year over year on higher revenues.

Revenues exhibited 27% improvement on higher asset under management (AUM) revenues. The company continues to strengthen its AUM and as such acquired Placemark with approximately $15.4 billion of AUM, 45,000 accounts and 3,400 advisors, for $66 million.

Envestnet estimates Placemark to generate $6 million in revenues in the fourth quarter. The company also projects fourth-quarter revenues from assets under management to be up 29% to 30%. Revenues are expected to improve 43% to 44% in 2014.

Riding on the strength of revenues, Envestnet expects adjusted EBITDA to increase 43% to 45% and operating earnings of 22 cents per share.

With respect to balance sheet strength, while cash and cash equivalents more than doubled from the 2013 level, shareholders' equity increased 17% from Dec 31, 2013.

This Zacks Rank #2 (Buy) stock has been witnessing upward revisions in estimates as all the estimates were revised higher over the last 60 days. For 2014, the Zacks Consensus Estimate for earnings moved north by 7% to 60 cents per share while for 2015, it increased 5.7% to 92 cents. The expected long-term earnings growth is 25%.

Stocks to Consider

Investors interested in financial transaction service providers can look at Global Payments Inc. (GPN), Total System Services, Inc. (TSS) and The Western Union Co. (WU). All these share the same Zacks Rank with Envestnet.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
TOTAL SYS SVC (TSS): Free Stock Analysis Report
 
WESTERN UNION (WU): Free Stock Analysis Report
 
GLOBAL PAYMENTS (GPN): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research