Envestnet (NYSE:ENV) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Envestnet, Inc. (NYSE:ENV) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of $0.59/share on revenue of $246.7 million. The consensus earnings per share (EPS) of $0.59/share is based on a poll of 9 analysts and represents a decline in eps of −1.0% over the same quarter last year, when the company reported earnings of $0.60/share.

The revenue forecast of $246.7 million based on a poll of 9 analysts implies a year-over-year (YoY) growth in revenue of 4.5%. Last year the company reported $236.1 million in revenue for the quarter.

Expected to report EPS contraction of −1.0% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $246.65 $236.08 4.5%
EPS $0.59 $0.60 −1.0%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Envestnet, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.47 $0.59 24.5% Beat
Q1, 2020 $0.45 $0.57 25.7% Beat
Q4, 2019 $0.68 $0.69 1.2% Beat
Q3, 2019 $0.58 $0.60 3.0% Beat
Q2, 2019 $0.44 $0.46 4.1% Beat
Q1, 2019 $0.38 $0.39 2.1% Beat
Q4, 2018 $0.59 $0.61 3.0% Beat
Q3, 2018 $0.50 $0.53 5.9% 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 5.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $84.44 $89.04 5.4% Increase
May 7, 2020 $61.76 $66.90 8.3% Increase
February 20, 2020 $86.23 $78.99 −8.4% Decline
November 7, 2019 $63.28 $64.44 1.8% 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 −2.87, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.87 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Envestnet, Inc. is currently trading at $77.10/share, down −3.5% for the day. The company is trading at approximately 83.5% of its 52-week high of $92.51/share. The company’s stock price is down −13.4% since the last earnings report and down −5.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 45.38 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:ENV Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −352.15 and a forward P/E multiple of 34.04.

Envestnet, Inc.’s current share price also implies a price-to-book (P/B) multiple of 4.72. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $77.10
P/E Ratio −352.2x
P/E Ratio (Fwd) 34.0x
PEG Ratio −14.6
Total Debt / Total Capital 13.7%
Levered Free Cash Flow $156 million
EV / EBITDA 36.0x

Finbox

Envestnet, Inc. is a mid-cap stock with a market capitalization of $4.296 billion and a total enterprise value of $4.884 billion. The company operates in the Information Technology sector and the Software industry.

Envestnet, Inc., together with its subsidiaries, provides intelligent systems for wealth management and financial wellness in the United States and internationally. It operates through Envestnet Welth Solutions and Envestnet Data & Analytics segments. The company’s product and services include Envestnet | Enterprise, which provides an end-to-end open architecture wealth management platform, as well as sells data aggregation and reporting, data analytics, and digital advice capabilities; Envestnet | Tamarac that provides trading, rebalancing, portfolio accounting, performance reporting, and client relationship management software; and Envestnet | MoneyGuide that provides goals-based financial planning solutions to the financial services industry. It also provides Envestnet | Retirement Solutions, which offer a suite of services for advisor-sold retirement plans; and Envestnet | Portfolio Management Consultants that provide research and consulting services to assist advisors in creating investment solutions for their clients, and portfolio overlay and tax optimization services, as well as data aggregation and data analytics platform, which offers cloud-based innovation for digital financial services. The company primarily serves banks, wealth management and brokerage firms, internet services companies, and registered investment advisers. Envestnet, Inc. was founded in 1999 and is headquartered in Chicago, Illinois.

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