Last week, you might have seen that SEI Investments Company (NASDAQ:SEIC) released its annual result to the market. The early response was not positive, with shares down 9.9% to US$53.89 in the past week. Results were roughly in line with estimates, with revenues of US$1.7b and statutory earnings per share of US$3.00. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for SEI Investments from eight analysts is for revenues of US$1.83b in 2021 which, if met, would be a meaningful 8.9% increase on its sales over the past 12 months. Per-share earnings are expected to swell 17% to US$3.58. In the lead-up to this report, the analysts had been modelling revenues of US$1.82b and earnings per share (EPS) of US$3.53 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$67.83, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values SEI Investments at US$72.00 per share, while the most bearish prices it at US$64.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that SEI Investments' rate of growth is expected to accelerate meaningfully, with the forecast 8.9% revenue growth noticeably faster than its historical growth of 5.0%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that SEI Investments is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$67.83, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple SEI Investments analysts - going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - SEI Investments has 1 warning sign we think you should be aware of.
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