Cohen & Steers (CNS)

Investment management firm Cohen & Steers (NYSE:CNS) reported revenue ahead of Wall Street’s expectations in Q3 CY2025, with sales up 6.4% year on year to $141.7 million. Its non-GAAP profit of $0.81 per share was 3.8% above analysts’ consensus estimates.

Company Overview

Founded in 1986 as a pioneer in real estate investment trusts (REITs), Cohen & Steers (NYSE:CNS) is an investment manager specializing in real estate securities, infrastructure, real assets, and preferred securities for institutional and individual 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.

Cohen & Steers competes with other specialized asset managers like Brookfield Asset Management (NYSE:BAM), Nuveen (a subsidiary of TIAA), BlackRock (NYSE:BLK), and Invesco (NYSE:IVZ) in the real assets and alternative investment space.

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Regrettably, Cohen & Steers’s revenue grew at a mediocre 6.2% compounded annual growth rate over the last five years. This fell short of our benchmark for the financials sector and is a poor baseline for our analysis.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Cohen & Steers’s annualized revenue growth of 5.5% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. 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, Cohen & Steers reported year-on-year revenue growth of 6.4%, and its $141.7 million of revenue exceeded Wall Street’s estimates by 2.1%.

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.

Interest income and expenses play a big role in financial institutions' profitability, so they should be factored into the definition of profit. Taxes, however, should not as they are largely out of a company's control. This is pre-tax profit by definition.

Over the last four years, Cohen & Steers’s pre-tax profit margin has fallen by 4.4 percentage points, going from 35.1% to 39.5%. It has also expanded by 4.1 percentage points on a two-year basis, showing its expenses have consistently grown at a slower rate than revenue. This typically signals prudent management.

Cohen & Steers’s pre-tax profit margin came in at 39.2% this quarter. This result was 11.5 percentage points worse than the same quarter last year.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Cohen & Steers’s EPS grew at a weak 3.7% compounded annual growth rate over the last five years, lower than its 6.2% annualized revenue growth. However, its pre-tax profit margin actually improved during this time, telling us that non-fundamental factors such as taxes affected its ultimate earnings.

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 Cohen & Steers, its two-year annual EPS growth of 2% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q3, Cohen & Steers reported adjusted EPS of $0.81, up from $0.77 in the same quarter last year. This print beat analysts’ estimates by 3.8%. Over the next 12 months, Wall Street expects Cohen & Steers’s full-year EPS of $3.07 to grow 7.7%.

Financial firms profit by providing a wide range of services, making them fundamentally balance sheet-driven enterprises with multiple intermediation roles. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these multifaceted institutions.

Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark for the sector. This metric captures real, liquid net worth per share that reflects the institution’s overall financial health across all business lines. Other (and more commonly known) per-share metrics like EPS can sometimes be murky due to the complexity of multiple business lines, M&A activity, or accounting rules that vary across different financial services segments.

Cohen & Steers’s TBVPS grew at an excellent 17.2% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 18.7% annually over the last two years from $7.07 to $9.97 per share.

Return on equity (ROE) measures how effectively banks generate profit from each dollar of shareholder equity - a critical funding source. High-ROE institutions typically compound shareholder wealth faster over time through retained earnings, share repurchases, and dividend payments.

Over the last five years, Cohen & Steers has averaged an ROE of 40%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This is a bright spot for Cohen & Steers.

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.

Cohen & Steers has no debt, so leverage is not an issue here.

It was encouraging to see Cohen & Steers beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 2% to $67.12 immediately following the results.

Updated: December 4, 2025 at 11:26 PM EST

A common mistake we notice when investors are deciding whether to buy a stock or not is that they simply look at the latest earnings results. Business quality and valuation matter more, so we urge you to understand these dynamics as well.

Cohen & Steers doesn’t top our investment wishlist, but we understand that it’s not a bad business. Although its revenue growth was uninspiring over the last five years, its growth over the next 12 months is expected to be higher. And while Cohen & Steers’s weak EPS growth over the last five years shows it’s failed to produce meaningful profits for shareholders, its stellar ROE suggests it has been a well-run company historically.

Cohen & Steers’s P/E ratio based on the next 12 months is 18.5x. Investors with a higher risk tolerance might like the company, but we think the potential downside is too great. We're fairly confident there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $74.33 on the company (compared to the current share price of $62.65).