SEI Investments (SEIC) Margin Surge Reinforces Bullish Narratives on Profitability and Value

SEI Investments (SEIC) posted net profit margins of 31.1%, a notable rise from last year’s 26.6%, and delivered earnings growth of 27.9% over the last twelve months, well ahead of its 5-year average growth of 5.2% per year. With revenue forecast to grow at 5.8% annually and strong valuation metrics, investors have fresh reasons to watch SEIC’s momentum closely in the capital markets sector.

See our full analysis for SEI Investments.

Next up, we’ll set these results against the chief narratives in the market to see whether the newest performance data confirms or disrupts investor expectations for SEI Investments.

See what the community is saying about SEI Investments

Analyst Price Target Just 18.6% Above Current Share Price

• The latest analyst consensus price target for SEI Investments is $96.71, which stands just 18.6% above the current share price of $81.53. This suggests modest upside compared to fast-growing peers and industry averages.
• According to the analysts' consensus view, stable revenue growth (4.8% annually over the next three years) and shrinking margins (from 31.3% to 28.9%) are already reflected in these estimates.
  • Consensus expects earnings to climb from $689.3 million now to $733.0 million by 2028, with shares outstanding projected to fall by 4.1% per year. This supports EPS growth even if top-line expansion remains steady.
  • Despite the anticipated margin pressure, analysts generally agree that, in the absence of any new catalysts, a gradual and sustained return is more likely for SEIC rather than a dramatic market re-rating at this time.

To see whether analysts’ cautious optimism or deeper tensions dominate, read the full Consensus Narrative for SEI Investments. 📊 Read the full SEI Investments Consensus Narrative.

PE Ratio at 14.4x Undercuts Industry Norms

• SEI Investments trades at a price-to-earnings ratio of 14.4x, well below both the US Capital Markets industry average of 25.9x and its direct peer group at 24.6x. This highlights a notable valuation gap that puts the stock closer to value territory than many competitors.
• Analysts' consensus narrative highlights that this relative discount is justified by steady, rather than breakout, earnings growth.
  • With revenue forecast to grow at just 5.8% per year and profit margins expected to ease from current highs, the lower valuation reflects more moderate future growth expectations compared to higher-multiple peers.
  • What is surprising is that despite strong profitability (current margins at 31.1%), the market still factors in heightened margin risk and competitive pressures. This helps explain why the discount persists and the gap to fair value remains wide.

DCF Fair Value Signals Wider Upside Than Analyst Target

• The estimated DCF fair value of $100.64 for SEI Investments is 23.5% above the current share price, indicating a materially larger margin of potential upside versus the analyst consensus target.
• Analysts' consensus view considers the current price as already accounting for most of the dependable growth drivers, such as disciplined capital allocation and rising recurring revenues. Only successful execution on new initiatives or operating leverage could help the stock realize its DCF upside.
  • Heavy investment requirements and market shifts remain the main factors holding back a quicker rerating, which tempers how much value investors are willing to place on future cash flows today.
  • This dual-track assessment means SEIC is positioned for incremental gains if company execution outpaces expectations, but investors are still hesitant to fully price in long-range upside.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for SEI Investments on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding SEI Investments.

See What Else Is Out There

While SEI Investments is profitable, its lower valuation reflects concerns about slowing growth, margin pressure, and limited near-term upside compared to industry peers.

If you want to target more consistent growth and less risk from earnings slowdowns, check out stable growth stocks screener (2089 results) offering companies with proven, steady results and stability through changing market cycles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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