Equitable Holdings (EQH)

Financial services company Equitable Holdings (NYSE:EQH) missed Wall Street’s revenue expectations in Q3 CY2025, with sales falling 61.6% year on year to $1.45 billion. Its non-GAAP profit of $1.48 per share was 8.5% below analysts’ consensus estimates.

Company Overview

Tracing its roots back to 1859 as one of America's oldest financial institutions, Equitable Holdings (NYSE:EQH) provides retirement planning, asset management, and life insurance products through its two main franchises, Equitable and AllianceBernstein.

Life insurance companies collect premiums from policyholders in exchange for providing a future death benefit or retirement income stream. Interest rates matter for the sector (and make it cyclical), with higher rates allowing insurers to reinvest their fixed-income portfolios at more attractive yields and vice versa. Additionally, favorable demographic shifts, such as an aging population, are driving strong demand for retirement products while AI and data analytics offer significant opportunities to improve underwriting accuracy and operational efficiency. Conversely, the industry faces headwinds from persistent competition from agile insurtechs that threaten traditional distribution models.

Equitable Holdings competes with major financial services and insurance companies including Prudential Financial (NYSE:PRU), MetLife (NYSE:MET), and Lincoln National (NYSE:LNC) in the retirement and insurance markets. In asset management, AllianceBernstein faces competition from firms like BlackRock (NYSE:BLK), T. Rowe Price (NASDAQ:TROW), and Franklin Resources (NYSE:BEN).

Insurance companies earn revenue from three primary sources: 1) The core insurance business itself, often called underwriting and represented in the income statement as premiums 2) Income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities 3) Fees from various sources such as policy administration, annuities, or other value-added services. Unfortunately, Equitable Holdings struggled to consistently increase demand as its $12.99 billion of revenue for the trailing 12 months was close to its revenue five years ago. This was below our standards and is a sign of poor business quality.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Just like its five-year trend, Equitable Holdings’s revenue over the last two years was flat, suggesting it is in a slump. 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, Equitable Holdings missed Wall Street’s estimates and reported a rather uninspiring 61.6% year-on-year revenue decline, generating $1.45 billion of revenue.

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

This is because insurers are balance sheet businesses, where assets and liabilities define the core economics. This means that interest income and expense should be factored into the definition of profit but taxes - which are largely out of a company’s control - should not.

Over the last four years, Equitable Holdings’s pre-tax profit margin has fallen by 16 percentage points, going from negative 18.6% to negative 2.6%. However, the company gave back some of its expense savings as its pre-tax profit margin declined by 15.6 percentage points on a two-year basis.

In Q3, Equitable Holdings’s pre-tax profit margin was negative 93%. This result was 92.6 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.

Equitable Holdings’s EPS grew at a weak 3% compounded annual growth rate over the last five years. On the bright side, this performance was better than its flat revenue and tells us management responded to softer demand by adapting its cost structure.

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 Equitable Holdings, its two-year annual EPS growth of 11.4% was higher than its five-year trend. Accelerating earnings growth is almost always an encouraging data point.

In Q3, Equitable Holdings reported adjusted EPS of $1.48, down from $1.53 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Equitable Holdings’s full-year EPS of $5.45 to grow 41.4%.

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.

Equitable Holdings currently has $4.33 billion of debt and $4.21 billion of shareholder's equity on its balance sheet, and over the past four quarters, has averaged a debt-to-equity ratio of 2.3×. We think this is dangerous - for an insurance business, anything above 1.0× raises red flags.

Return on Equity, or ROE, ties everything together and is a vital metric. It tells us how much profit the insurer generates for each dollar of shareholder equity entrusted to management. Over a long period, insurers with higher ROEs tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, Equitable Holdings has averaged an ROE of 17.2%, excellent for a company operating in a sector where the average shakes out around 12.5% and those putting up 20%+ are greatly admired. This is a bright spot for Equitable Holdings.

We struggled to find many positives in these results. Its revenue missed and its EPS fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 1.6% to $48.11 immediately following the results.

Updated: December 3, 2025 at 11:37 PM EST

Before investing in or passing on Equitable Holdings, we urge you to understand the company’s business quality (or lack thereof), valuation, and the latest quarterly results - in that order.

We cheer for all companies serving everyday consumers, but in the case of Equitable Holdings, we’ll be cheering from the sidelines. To begin with, its revenue growth was weak over the last five years. And while its projected EPS for the next year implies the company’s fundamentals will improve, the downside is its BVPS has declined over the last five years. On top of that, its weak EPS growth over the last five years shows it’s failed to produce meaningful profits for shareholders.

Equitable Holdings’s P/E ratio based on the next 12 months is 5.8x. While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are superior stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $64.17 on the company (compared to the current share price of $45.63).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.