Last Updated: 12 Nov 2024
Executive Summary
Envestnet Inc. (ENV) is a provider of wealth management software and services. The company has a market capitalization of $3.48 billion and trades on the NYSE. ENV's latest stock price is $62.98. The company's financial performance has been mixed in recent quarters, with revenue growth offset by declining profitability. Analysts have a Hold rating on the stock, with a target price of $64.63.
Company Overview
Envestnet provides wealth management software and services to financial advisors and institutions. The company's software platform helps advisors manage client portfolios, track performance, and generate reports. Envestnet also offers a range of investment products and services, including mutual funds, ETFs, and annuities.
The company's target market is financial advisors and institutions that serve high-net-worth individuals and families. Envestnet has a strong market position, with a large and growing customer base. The company's software platform is well-regarded in the industry, and Envestnet has a strong track record of innovation.
Fundamental Analysis
Envestnet's financial performance has been mixed in recent quarters. Revenue has grown steadily, but profitability has declined. In the most recent quarter, revenue increased by 0.092% year-over-year, but net income declined by 6%.
The company's gross margin has also declined in recent quarters, from 23.5% in Q3 2023 to 23.3% in Q3 2024. This decline is due to rising costs, including higher employee compensation and technology expenses.
Envestnet's profitability has also been impacted by a number of one-time charges, including a $10 million charge for severance costs in Q3 2024. Excluding these charges, the company's net income would have been higher.
Technical Analysis
Envestnet's stock price has been in a downtrend since early 2023. The stock has fallen from a high of $73.04 in January 2023 to a low of $34.87 in October 2023. The stock has since rebounded, but it remains below its 50-day and 200-day moving averages.
The stock's technical indicators are mixed. The relative strength index (RSI) is below 50, indicating that the stock is oversold. However, the moving average convergence divergence (MACD) is above 0, indicating that the stock is in a bullish trend.
Short Term Outlook
Envestnet's short-term outlook is uncertain. The company's financial performance has been mixed, and the stock price has been in a downtrend. The stock's technical indicators are also mixed.
In the short term, Envestnet's stock price is likely to trade in a range between $60 and $65. The stock could break out of this range if the company reports strong financial results or if the overall market sentiment improves. However, the stock could also fall further if the company's financial performance continues to decline or if the overall market sentiment worsens.
Long Term Outlook
Envestnet's long-term outlook is more positive. The company has a strong market position, and its software platform is well-regarded in the industry. The company is also benefiting from the growing trend towards digital wealth management.
Over the long term, Envestnet's stock price is likely to rise as the company continues to grow its revenue and profitability. The stock could also benefit from a multiple expansion if the overall market sentiment improves.
Analyst Recommendations
Analysts have a Hold rating on Envestnet's stock, with a target price of $64.63. This target price implies a potential upside of 2.6% from the current stock price.
Seven analysts have a Hold rating on the stock, while no analysts have a Buy or Sell rating. The consensus price target among analysts is $64.63.
