Here's Why You Should Hold on to Envestnet (ENV) Stock For Now
Envestnet's (ENV) business model ensures solid asset-based and subscription-based recurring revenue generation capacity.
Envestnet, Inc. ENV has an impressive Growth Score of A. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth. Envestnet’s revenues are expected to register 17.2% growth in 2021 and 12.7% in 2022.
Factors That Bode Well
Envestnet’s business model ensures solid asset-based and subscription-based recurring revenue generation capacity. Asset-based recurring revenues of $170 million increased 39% and subscription-based recurring revenues of $113 million were up 7% in the second quarter of 2021.
The company’s technology-enabled services are expected to register handsome growth as trends such as increasing demand for personalized wealth management services and guided advice in a cost-effective manner are creating significant market opportunities.
Envestnet continues to focus on technology development to improve operational efficiency, increase market competitiveness, address regulatory demands and cater to client-driven requests for new capabilities. The company’s technology design facilitates significant scalability.
Debt Woe Stays
Envestnet's total debt to total capital ratio of 0.48 at the end of the second quarter of 2021 was higher than the industry’s 0.37. A higher debt, as a percentage of total capital, indicates a higher risk of insolvency.
Envestnet's cash and cash equivalent balance of $370 million at the end of the quarter was well below the long-term debt level of $846 million. This underscores that the company doesn’t have enough cash to meet this debt burden.
Zacks Rank and Stocks to Consider
Envestnet currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Business Services sector are ManpowerGroup MAN, Cross Country Healthcare CCRN and Genpact G, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected earnings per share (three to five years) growth rate for ManpowerGroup, Cross Country Healthcare and Genpact is pegged at 24.2%, 9.9% and 14.7%, respectively.
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ManpowerGroup Inc. (MAN): Free Stock Analysis Report
Genpact Limited (G): Free Stock Analysis Report
Envestnet, Inc (ENV): Free Stock Analysis Report
Cross Country Healthcare, Inc. (CCRN): Free Stock Analysis Report
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