By:
Shant Poladian, AIM Student at Marquette University
Disclosure:
The AIM Equity Fund currently holds this position. This article was written by
myself, and it expresses my own opinions. I am not receiving compensation for
it and I have no business relationship with any company whose stock is
mentioned in this article.
• Envestnet, Inc. (NASDAQ: ENV) is a leading provider of intelligent systems
for wealth management and financial wellness. Envestnet’s unified technology
systems enhances advisor productivity and strengthens the wealth management process.
Envestnet empowers enterprises and advisors to more fully understand their clients
and deliver better outcomes.
• For the fourth quarter,
adjusted revenue grew by 15%, adjusted EBITDA grew 30% and adjusted earnings
per share grew 13% from last year.
• Envestnet acquired
PortfolioCenter. PortfolioCenter is a portfolio management solution to help
emerging registered investment advisers (RIAs) streamline their daily
operations and enrich their client reporting.
• Envestnet also acquired
MoneyGuide. MoneyGuide provides leading goals-based financial planning solutions
to the financial services industry.
• Envestnet signed
application programming interfaces (API) agreement with Charles Schwab.
Key
points: On April 1, 2019, Envestnet
acquired the liabilities of the PortfolioCenter business from Performance
Technologies, Inc. The PortfolioCenter business provides investment advisors
and investment advisory service providers with desktop, hosted and outsourced
software solutions. These solutions provide data-management and
performance-measurement tools, as well as customizable accounting, reporting,
and billing functions delivered through the commercial software application
products known as PortfolioCenter Desktop, PortfolioCenter Hosted,
PortfolioServices and Service Bureau.
On
May 1, 2019, Envestnet acquired all of the outstanding shares of PIEtech, Inc.,
a Virginia corporation. PIEtech empowers financial advisors to use financial
planning to efficiently motivate their clients to create, implement and
maintain financial plans that best meet their lifetime financial goals. The
technology and operations of PIEtech, which now operates as Envestnet
MoneyGuide, has been integrated into our Envestnet Wealth Solutions segment.
MoneyGuide
was named the number one financial planning software by the 2020 edition of the
Inside Information Survey, as astonishing 12 years in a row. MoneyGuide’s
popularity spans firms of all sizes, experience levels, and business models.
Recently, Morgan Stanley licensed MoneyGuide’s entire planning offerings for an
additional three years.
Lastly,
Envestnet recently announced that it has reached a financial data-access
agreement with Charles Schwab. Per the agreement, Envestnet will allow Charles
Schwab clients to connect to the Envestnet platform and share their financial
data with more than 1,200 third-party financial service providers powered by
the platform. Furthermore, this platform provides clients visibility and
transparency into the linked accounts allowing them to view what type of data
is accessed by which third party.
What
has the stock done lately? On April 17,
2020, ENV closed at $53.53 per share, and incurred a 7.3% gain the following day,
closing at $57.44 per share. Following ENV fourth quarter earnings results, the
stock price has remained between $47.07-$78.99. At ENV’s most recent earnings
call, the CFO announced 2020’s first quarter outlook of expected growth between
21% and 22% compared to the prior year.
Past
Year Performance: Over the past
year, ENV reached a 52-week high at $87.75, and a 52-week low at $45.53. Over
the past year, ENV is down $16.36, or 23.34%. YTD HCKT is down $17.91, or 24.24%.
Source:
FactSet
My
Takeaway
Uncertainty in American
markets, due to the COVID-19 pandemic, is unpredictable, but I believe in times
of crisis we need additional guidance in financial management services. I am optimistic
that ENV will continue to recognize revenue growth in the U.S., as demand increases
for financial management tools, such as MoneyGuide and PortfolioCenter. Moreover,
growing relationships with Charles Scwab and Morgan Stanley will enable ENV to
position itself ahead of competitors. With these reasons, I believe ENV represents
a hold.
Source:
FactSet
