SEI Investments (SEIC)

Financial technology provider SEI Investments (NASDAQ:SEIC) announced better-than-expected revenue in Q4 CY2025, with sales up 9.1% year on year to $607.9 million. Its GAAP profit of $1.38 per share was 2.1% above analysts’ consensus estimates.

Company Overview

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.

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.

SEI Investments competes with financial technology and investment management firms including Broadridge Financial Solutions (NYSE:BR), SS&C Technologies (NASDAQ:SSNC), BlackRock (NYSE:BLK), and Fidelity National Information Services (NYSE:FIS).

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, SEI Investments’s revenue grew at a mediocre 6.4% compounded annual growth rate over the last five years. This wasn’t a great result compared to the rest of the financials sector, but there are still things to like about SEI Investments.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. SEI Investments’s annualized revenue growth of 9.4% over the last two years is above its five-year trend, suggesting some bright spots. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, SEI Investments reported year-on-year revenue growth of 9.1%, and its $607.9 million of revenue exceeded Wall Street’s estimates by 1.4%.

Assets Under Management (AUM) is the total capital a firm oversees or manages on behalf of clients. Fees on this AUM, typically a small percentage, are contractually recurring and provide a high level of stability to revenue even if investment performance lags (although too much poor investment performance eventually hurts fundraising ability).

SEI Investments’s AUM has grown at an annual rate of 5.1% over the last five years, worse than the broader financials industry and slower than its total revenue. When analyzing SEI Investments’s AUM over the last two years, we can see that growth accelerated to 9.4% annually. This performance aligned with its total revenue.

In Q4, SEI Investments’s AUM was $215.9 billion, falling 60.5% short of analysts’ expectations. This print was 13.7% higher than the same quarter last year.

Revenue growth is one major determinant of business quality, and the efficiency of operations is another. For Custody Bank companies, we look at pre-tax profit rather than the operating margin that defines sectors such as consumer, tech, and industrials.

The pre-tax profit margin includes interest because it's central to how financial institutions generate revenue and manage costs. Tax considerations are excluded since they represent government policy rather than operational performance, giving investors a clearer view of business fundamentals.

Over the last five years, SEI Investments’s pre-tax profit margin has fallen by 6.1 percentage points, going from 36.2% to 39.9%. It has also expanded by 8.9 percentage points on a two-year basis, showing its expenses have consistently grown at a slower rate than revenue. This typically signals prudent management.

SEI Investments’s pre-tax profit margin came in at 35.7% this quarter. This result was 1.4 percentage points better than the same quarter last year.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

SEI Investments’s EPS grew at a solid 13.4% compounded annual growth rate over the last five years, higher than its 6.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For SEI Investments, its two-year annual EPS growth of 27.6% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q4, SEI Investments reported EPS of $1.38, up from $1.19 in the same quarter last year. This print beat analysts’ estimates by 2.1%. Over the next 12 months, Wall Street expects SEI Investments’s full-year EPS of $5.63 to stay about the same.

Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.

Over the last five years, SEI Investments has averaged an ROE of 26.6%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows SEI Investments has a strong competitive moat.

The debt-to-equity ratio is a widely used measure to assess a company's balance sheet health. A higher ratio means that a business aggressively financed its growth with debt. This can result in higher earnings (if the borrowed funds are invested profitably) but also increases risk.

If debt levels are too high, there could be difficulties in meeting obligations, especially during economic downturns or periods of rising interest rates if the debt has variable-rate payments.

SEI Investments currently has $8.68 million of debt and $2.46 billion of shareholder's equity on its balance sheet, and over the past four quarters, has averaged a debt-to-equity ratio of 0×. We think this is safe and raises no red flags. In general, we’re comfortable with any ratio below 3.5× for a financials business.

It was good to see SEI Investments narrowly top analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its AUM missed. Overall, this print had some key positives. The stock remained flat at $85.97 immediately following the results.

Updated: January 28, 2026 at 11:11 PM EST

When considering an investment in SEI Investments, investors should account for its valuation and business qualities as well as what’s happened in the latest quarter.

There is a lot to like about SEI Investments. Although its revenue growth was mediocre over the last five years, its growth over the next 12 months is expected to be higher. And while its AUM growth was uninspiring over the last five years, its stellar ROE suggests it has been a well-run company historically. In addition, SEI Investments’s expanding pre-tax profit margin shows the business has become more efficient.

SEI Investments’s P/E ratio based on the next 12 months is 14.8x. Scanning the financials space today, SEI Investments’s fundamentals really stand out, and we like it at this price.

Wall Street analysts have a consensus one-year price target of $98.83 on the company (compared to the current share price of $85.96), implying they see 15% upside in buying SEI Investments in the short term.