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SS&C Technologies Q3 Earnings: Can NasdaqGS:SSNC Hit Its $0.99 EPS Target?

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SS&C Technologies Holdings, Inc. (NasdaqGS:SSNC) is scheduled to report Q3 earnings results after markets close for trading on October 28, 2020.

The company is expected to report earnings of $0.99/share on revenue of $1.131 billion. The consensus earnings per share (EPS) of $0.99/share is based on a poll of 14 analysts and represents a growth in eps of 6.5% over the same quarter last year, when the company reported earnings of $0.93/share.

The revenue forecast of $1.131 billion based on a poll of 11 analysts implies a year-over-year (YoY) decline in revenue of −1.7%. Last year the company reported $1.151 billion in revenue for the quarter.

Expected to report EPS growth of 6.5% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,131.08 $1,150.80 −1.7%
EPS $0.99 $0.93 6.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and met expectations 1 quarters.

What are your expectations from SS&C Technologies Holdings, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.90 $1.04 15.4% Beat
Q1, 2020 $0.96 $1.03 7.7% Beat
Q4, 2019 $0.97 $1.08 11.5% Beat
Q3, 2019 $0.89 $0.93 4.8% Beat
Q2, 2019 $0.91 $0.91 0% Met
Q1, 2019 $0.87 $0.91 4.5% Beat
Q4, 2018 $0.85 $0.95 12.1% Beat
Q3, 2018 $0.79 $0.79 0.6% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 1.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $57.40 $58.19 1.4% Increase
April 30, 2020 $56.06 $54.83 −2.2% Decline
February 12, 2020 $64.56 $65.58 1.6% Increase
October 31, 2019 $52.07 $57.52 10.5% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.75, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.75 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

SS&C Technologies Holdings, Inc. is currently trading at $64.06/share, down −1.7% for the day. The company is trading at approximately 96.0% of its 52-week high of $66.74/share. The company’s stock price is up 10.1% since the last earnings report and down −0.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 57.26 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:SSNC Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 32.65 and a forward P/E multiple of 15.32.

SS&C Technologies Holdings, Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.11. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $64.06
P/E Ratio 32.7x
P/E Ratio (Fwd) 15.3x
PEG Ratio 0.6
Total Debt / Total Capital 30.1%
Levered Free Cash Flow $1.415 billion
EV / EBITDA 13.4x

Finbox

SS&C Technologies Holdings, Inc. is a large-cap stock with a market capitalization of $16.5 billion and a total enterprise value of $23.445 billion. The company operates in the Information Technology sector and the Software industry.

SS&C Technologies Holdings, Inc., together with its subsidiaries, provides software products and software-enabled services to financial services and healthcare industries. The company owns and operates technology stack across securities accounting, front-to-back-office operations, performance and risk analytics, regulatory reporting, and healthcare information processes. Its products and services allow professionals in the financial services and healthcare industries to automate complex business processes and are instrumental in helping its clients to manage information processing requirements. The company’s software-enabled services include SS&C GlobeOp, SS&C asset management solutions, Black Diamond wealth platform, Advent outsourcing services, Advent data solutions, ALPS advisors, and virtual data rooms, as well as pharmacy, healthcare administration, and health outcomes optimization solutions. Its software products comprise portfolio accounting software, portfolio management software, trading software, digital process automation product suite, and banking and lending solutions, as well as research, analytics, and training solutions. The company also provides professional services that consist of consulting and implementation services to assist clients; and product support services. It operates in the United States; the United Kingdom; Europe, the Middle East, and Africa; the Asia Pacific and Japan; Canada; and the Americas. The company was founded in 1986 and is headquartered in Windsor, Connecticut.

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