SSNC - Embedded Expectations Analysis - 2021 12 01
SS&C Technologies Holdings, Inc. (SSNC) currently trades above historical but below corporate averages relative to Uniform earnings, with a 17.5x Uniform P/E (Fwd. V/E').At these levels, markets are pricing in expectations for Uniform ROA to compress to 41% in 2025, accompanied by 10% Uniform asset growth.
That said, given the firm's dominant market position as a back-office service provider for the asset management industry, there is fundamental potential for stronger-than-priced-in performance.
If the company can capitalize on its strong positioning, it could drive Uniform ROA to 80% with 13% Uniform asset growth going forward, which would imply a stock price closer to $210, representing significant equity upside for the firm.
However, the firm's most recent earnings call suggests management may have concerns about their financing activities and growth.
SS&C Technologies Holdings is a holding company. Through its subsidiaries, the company is a provider of software products and software-enabled services that allow financial services providers to automate business processes and manage their information processing requirements. The company provides its solutions to clients principally within the institutional asset and wealth management, alternative investment management, financial advisory and financial institutions vertical markets. In addition, the company's clients include commercial lenders, real estate investment trusts, corporate treasury groups, insurance and pension funds, municipal finance groups and real estate property managers.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.