Let’s dig into the relative performance of Ameriprise Financial (NYSE: AMP) and its peers as we unravel the now-completed Q3 custody bank earnings season.
Custody banks safeguard financial assets and provide services like settlement, accounting, and regulatory compliance for institutional investors. Growth opportunities stem from increasing global assets under custody, demand for data analytics, and blockchain technology adoption for settlement efficiency. Challenges include fee pressure from large clients, substantial technology investment requirements, and competition from both traditional players and fintech firms entering the space.
The 16 custody bank stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 5%.
In light of this news, share prices of the companies have held steady as they are up 4.8% on average since the latest earnings results.
Ameriprise Financial (NYSE: AMP)
Founded in 1894 and spun off from American Express in 2005, Ameriprise Financial (NYSE: AMP) provides financial planning, wealth management, asset management, and insurance products to help individuals and institutions achieve their financial goals.
Ameriprise Financial reported revenues of $4.73 billion, up 8.9% year on year. This print exceeded analysts’ expectations by 3.8%. Overall, it was a strong quarter for the company with a solid beat of analysts’ Asset Management segment estimates and an impressive beat of analysts’ revenue estimates.
Interestingly, the stock is up 1.9% since reporting and currently trades at $487.58.
Best Q3: Hamilton Lane (NASDAQ: HLNE)
With over $100 billion in assets under management and supervision, Hamilton Lane (NASDAQ: HLNE) is an investment management firm that specializes in private markets, offering advisory services and fund solutions to institutional and private wealth investors.
Hamilton Lane reported revenues of $190.9 million, up 27.3% year on year, outperforming analysts’ expectations by 12.8%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.
The market seems happy with the results as the stock is up 14.6% since reporting. It currently trades at $131.75.
Is now the time to buy Hamilton Lane? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: P10 (NYSE: PX)
Operating as a bridge between institutional investors and hard-to-access private market opportunities, P10 (NYSE: PX) is an alternative asset management firm that provides access to private equity, venture capital, impact investing, and private credit opportunities in the middle and lower middle markets.
P10 reported revenues of $75.93 million, up 2.3% year on year, falling short of analysts’ expectations by 4.5%. It was a slower quarter as it posted a significant miss of analysts’ EBITDA and management fees estimates.
P10 delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 7.1% since the results and currently trades at $9.83.
Read our full analysis of P10’s results here.
Voya Financial (NYSE: VOYA)
Originally spun off from Dutch financial giant ING in 2013 and rebranded with a name suggesting "voyage," Voya Financial (NYSE: VOYA) provides workplace benefits and savings solutions to U.S. employers, helping their employees achieve better financial outcomes through retirement plans and insurance products.
Voya Financial reported revenues of $1.94 billion, up 4% year on year. This print surpassed analysts’ expectations by 13%. Overall, it was an exceptional quarter as it also produced a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.
The stock is up 2.1% since reporting and currently trades at $75.19.
Read our full, actionable report on Voya Financial here, it’s free for active Edge members.
SEI Investments (NASDAQ: SEIC)
Founded in 1968 as Simulated Environments Inc. to train bank loan officers using computer simulations, SEI Investments (NASDAQ: SEIC) provides technology platforms, investment management, and operational solutions for financial institutions, wealth managers, and investors.
SEI Investments reported revenues of $578.5 million, up 7.7% year on year. This number lagged analysts' expectations by 0.5%. More broadly, it was a mixed quarter as it also recorded a beat of analysts’ EPS estimates but a significant miss of analysts’ AUM estimates.
The stock is up 2% since reporting and currently trades at $83.05.
Read our full, actionable report on SEI Investments here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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