Based on the latest analyst predictions, SEI Investments Co (NASDAQ:SEIC) is estimated to sizably grow its earnings by 37.80% in the upcoming three years. At a current EPS of $2.23, shareholders can expect next year’s EPS to be around $3.25. A positive earnings growth may please investors on the surface, but it’s important to compare this expectation to SEIC’s track record. This will give investors context as to whether the growth prospect is justified and bolstered by past trends. Today I will look at the latest data in order to investigate whether this expected growth rate is plausible. Check out our latest analysis for SEI Investments
Exciting times ahead for SEIC
SEIC is covered by 4 analysts who by consensus are expecting a 37.8% increase in earnings over the next 3 years. This would see the EPS rise to $3.25, which would no doubt please investors who are used to an average of $2 over the past few years. In the same period we are supposed to see the revenue grow from $1.46 Billion to $1.84 Billion in 2020 and profit is predicted to escalate from $355 Million to $487 Million in 2020, roughly growing 1.4x. At this future level of revenue and profit, margins are predicted to be extremely healthy.
Is this similar growth to the past?
The past can be a helpful indicator for future performance for a stock. We can determine whether this level of expected growth is sustainable and whether the company continues to go from strength to strength. SEIC’s earnings growth in the last five years was a unexciting 11.13%, indicating a relatively more bullish outlook for the company in the near future. This belief may be supported by turnaround initiatives implemented in the past or previous investments coming to fruition.
On the whole, SEIC looks like it is well-placed to deliver solid growth in the upcoming years, supported by analysts’ high growth projections. However, in order to determine whether this bullish sentiment is yet to be accounted for by the market, we also need to see if it is undervalued. As Warren Buffett’s right-hand man Charlie Munger said, “No matter how wonderful a business is, it’s not worth an infinite price“. Is SEIC an undervalued gem? Let’s find out in this free analysis report. If you are not interested in SEIC anymore, you can use our free platform to see my list of over 150 other stocks with a high growth potential.
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