Artisan Partners (APAM) Earnings Growth Rebounds, Net Margin Decline Reinforces Profitability Concerns

Artisan Partners Asset Management (APAM) posted a 4.4% increase in earnings growth over the past year, reversing its five-year average decline of -0.4% per year. The company’s net profit margin came in at 21%, just shy of last year's 21.9%, while revenue and earnings are forecast to rise at 7.1% and 10.9% per year, respectively, both pacing below broader US market expectations. With the stock trading at $43.59, below its estimated fair value of $45.97, and sporting a lower-than-average price-to-earnings ratio of 12.6x, APAM stands out for attractive valuation and a history of quality earnings, despite a minor risk flagged for its dividend sustainability.

See our full analysis for Artisan Partners Asset Management.

Next up, we will set these fresh results against the community’s widely held narratives to see where the numbers support the story and where they might challenge conventional thinking.

See what the community is saying about Artisan Partners Asset Management

Margins Face Pressure from Expansion Costs

• Net profit margin stands at 21%, a slip from 21.9% last year. This reflects the impact of increased operational costs tied to expanding from 5 to 11 investment teams and launching more strategies.
• Analysts' consensus view highlights that scaling up new investment products and entering private wealth channels has boosted revenue opportunities. However, higher marketing and operational complexity are starting to erode net margins.
  • New launches and distribution focus require significant investment, which analysts expect will lower profit margins from 21.7% today to 21.2% over three years.
  • Despite margin pressure, underlying earnings quality remains strong, supporting continued interest from investors focused on operational discipline.
• For a balanced view on how APAM’s strategic shifts affect profitability, see the full consensus narrative:

📊 Read the full Artisan Partners Asset Management Consensus Narrative.

Growth Paces Behind Market Leaders

• Analysts forecast annual revenue growth of 7.1% and earnings growth of 10.9%, both tracking below the broader US market averages of 10.2% and 15.6% respectively.
• According to analysts' consensus view, expanding the range of asset classes and channels positions APAM to capture additional market share. Growth is expected to lag market leaders as new strategy launches deliver incremental gains rather than breakout advances.
  • Estimates point to earnings rising from $247.0 million to $303.7 million by 2028, a steady but unspectacular projection compared to faster-growing competitors.
  • Consensus sees APAM as relatively stable but not a high-growth outlier among peers due to the measured pace of new asset class adoption.

Valuation Still Attractive Versus Industry

• The current price-to-earnings ratio of 12.6x is below the peer average of 13.9x and significantly below the US Capital Markets industry average of 26.7x. Shares are trading at $43.59, modestly under both the $45.00 analyst price target and the $45.97 DCF fair value.
• Consensus narrative points out that, although margin and growth metrics slightly trail the market, APAM’s lower valuation multiples help offset these concerns and make it appealing to value-oriented investors.
  • The slim 0.8% difference between share price and analyst price target signals little room for upside but adds evidence that shares are fairly valued by the market.
  • Emphasis on disciplined expense management and solid liquidity supports the idea that APAM’s present valuation is justified even if sector growth slows.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Artisan Partners Asset Management 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 great starting point for your Artisan Partners Asset Management research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

See What Else Is Out There

Artisan Partners Asset Management’s earnings and revenue growth are solid but trail market leaders. This suggests a slower, steadier pace compared to high-growth peers.

If you want to target companies forecast to deliver stronger earnings expansion over the coming years, check out our high growth potential stocks screener (62 results) for standout opportunities ready to outperform.

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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