SEI Investments (SEIC) Stock Forecast & Price Target

SEI Investments has demonstrated positive growth across its various segments, benefitting from a rising asset value environment that contributes significantly to its asset-based revenue model. The company reported an increase in institutional investors' margin to 48.3% and maintains a robust pipeline, particularly within Private Banking, which suggests a stable outlook for continued financial performance. Additionally, SEI's Stratos segment is exhibiting strong organic growth at approximately 10% in net flows and a notable 40%+ EBITDA margin in 2024, underscoring the firm's commitment to investing in talent and technology to drive future growth.

The financial excerpts indicate a decline in operating margins across SEI Investments' segments, with the private banks segment reporting a decrease from 16.7% to 16.1% and overall consolidated margins falling to 27.2% from 28.5%. Additionally, the company experienced a significant drop in net sales events, which fell to $29.2 million from $46.6 million in the prior quarter, despite a slight increase over estimates. Management's commentary on persistently low margins and the adjustment of earnings per share estimates for 2025 and 2026 reflect a cautious outlook, as margins are anticipated to remain at current levels through year-end, exacerbating concerns regarding profitability.