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T Rowe Price (TROW)
NASDAQ:TROW
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T Rowe Price
(NASDAQ:TROW)70Outperform
Positive Factors
Cost Management
The initial read on 2025 expenses was well-received, indicating positive sentiment about future cost management.
Partnership Opportunities
TROW announced a new insurance partnership with ARES’s insurance partner (Aspida), with TROW/OHA managing public/private credit for a portion of Aspida’s balance sheet.
Negative Factors
Earnings Outlook
Lower estimates for 1Q25 earnings per share due to higher operating expenses and lower management fees.
T Rowe Price (TROW) vs. S&P 500 (SPY)
Market Cap
$22.29B
Dividend Yield4.77%
Average Volume (3M)1.62M
Price to Earnings (P/E)10.9
Beta (1Y)1.44
Revenue Growth9.80%
EPS Growth17.87%
CountryUS
Employees8,158
SectorFinancial
Sector Strength93
IndustryAsset Management Services
Share Statistics
EPS (TTM)9.15
Shares Outstanding222,634,490
10 Day Avg. Volume1,507,318
30 Day Avg. Volume1,623,505
Financial Highlights & Ratios
PEG Ratio0.61
Price to Book (P/B)N/A
Price to Sales (P/S)3.26
Price to Cash Flow (P/CF)-20.50
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$111.22Price Target Upside11.11% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering9
T Rowe Price Business Overview & Revenue Model
Company DescriptionMaryland-based T. Rowe Price Group, Inc. is a global investment management company that provides funds, advisory services, account management, and retirement plans and services. The company offers its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions.
How the Company Makes MoneyT. Rowe Price generates revenue primarily through investment advisory fees, which are based on a percentage of assets under management (AUM). The company's core revenue streams include fees from mutual funds, investment advisory services for institutional clients, and subadvisory services for other financial entities. These fees are typically charged on a daily basis but are accrued and billed monthly or quarterly. T. Rowe Price also earns revenue from administrative and distribution fees related to its mutual funds. The company's earnings are influenced by factors such as market performance, net asset inflows or outflows, and the overall growth in assets under management. While T. Rowe Price does not rely heavily on significant partnerships, its reputation and performance history play a critical role in maintaining and expanding its client base.
T Rowe Price Financial Statement Overview
Summary
T Rowe Price shows a robust financial profile with strong profitability metrics like a Net Profit Margin of 28.81% and a solid equity position indicated by a low Debt-to-Equity Ratio of 0.03. The company effectively manages its operations with high EBIT and EBITDA margins and demonstrates strong cash flow growth.Income Statement
T Rowe Price has demonstrated solid financial performance with a Gross Profit Margin of 51.92% and a Net Profit Margin of 28.81% for 2024, indicating efficient cost management and strong profitability. Revenue growth from 2023 to 2024 was 9.78%, reflecting positive market conditions and effective growth strategies. EBIT and EBITDA margins remain robust at 32.89% and 32.89%, respectively, showing operational efficiency.85
Very Positive
Balance Sheet
The company maintains a healthy balance sheet with a low Debt-to-Equity Ratio of 0.03, indicating low leverage and financial stability. The Return on Equity (ROE) is strong at 19.76%, showcasing effective use of shareholder funds. The Equity Ratio of 76.80% suggests a strong equity base relative to assets, minimizing financial risk.82
Very Positive
Cash Flow
T Rowe Price exhibits strong cash flow management with a Free Cash Flow Growth Rate of 85.07% from 2023 to 2024, driven by increased operating cash flows. The Operating Cash Flow to Net Income Ratio of 0.82 indicates efficient cash generation relative to net income. The Free Cash Flow to Net Income Ratio of 0.82 further supports the company's solid cash position.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.09B | 6.46B | 6.49B | 7.67B | 6.21B | Gross Profit |
| 3.68B | 3.21B | 5.14B | 6.47B | 5.27B | EBIT |
| 2.33B | 1.99B | 2.37B | 3.71B | 2.75B | EBITDA |
| 2.33B | 2.52B | 3.14B | 3.91B | 2.94B | Net Income Common Stockholders |
| 2.04B | 1.79B | 1.56B | 3.08B | 2.37B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.65B | 2.07B | 1.76B | 1.52B | 2.15B | Total Assets |
| 13.47B | 12.28B | 11.64B | 12.52B | 10.66B | Total Debt |
| 278.70M | 397.90M | 329.60M | 249.20M | 154.10M | Net Debt |
| -2.37B | -1.67B | -1.43B | -1.27B | -2.00B | Total Liabilities |
| 2.02B | 1.99B | 1.96B | 2.26B | 1.39B | Stockholders Equity |
| 10.35B | 9.51B | 8.84B | 9.02B | 7.71B |
| Cash Flow | Free Cash Flow | |||
| 1.26B | 911.20M | 2.12B | 3.21B | 1.70B | Operating Cash Flow |
| 1.69B | 1.22B | 2.36B | 3.45B | 1.92B | Investing Cash Flow |
| -177.50M | -527.20M | -41.50M | -1.10B | -36.30M | Financing Cash Flow |
| -936.60M | -1.08B | -2.08B | -2.99B | -1.49B |
T Rowe Price Technical Analysis
Negative
100.10
Price Trends
111.40
Negative
113.53
Negative
111.42
Negative
Market Momentum
-2.64
Positive
26.49
Positive
19.10
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TROW, the sentiment is Negative. The current price of 100.1 is below the 20-day moving average (MA) of 107.49, below the 50-day MA of 111.40, and below the 200-day MA of 111.42, indicating a bearish trend. The MACD of -2.64 indicates Positive momentum. The RSI at 26.49 is Positive, neither overbought nor oversold. The STOCH value of 19.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TROW.
T Rowe Price Risk Analysis
T Rowe Price disclosed 33 risk factors in its most recent earnings report. T Rowe Price reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
T Rowe Price Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $49.96B | 15.07 | 2.49% | 1.11% | 11.38% | 39.25% | |
80 Outperform | $6.50B | 16.12 | 8.69% | 3.78% | 18.85% | 7.96% | |
75 Outperform | $150.05B | 23.01 | 14.60% | 2.11% | 12.15% | 15.17% | |
72 Outperform | $7.16B | 13.59 | 5.32% | 4.89% | 3.97% | ― | |
70 Outperform | $22.29B | 10.93 | 19.76% | 4.77% | 9.80% | 17.87% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
64 Neutral | $10.28B | 30.00 | 3.03% | 6.30% | 9.48% | -65.57% |
* Financial Sector Average
Performance Comparison
TROW
T Rowe Price
100.10
-11.92
-10.64%
AMP
Ameriprise Financial
498.17
88.03
21.46%
BLK
BlackRock
951.79
135.72
16.63%
BEN
Franklin Resources
19.56
-6.77
-25.71%
IVZ
Invesco
16.00
1.00
6.67%
JHG
Janus Henderson Group
39.42
8.30
26.67%
T Rowe Price Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -13.37% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant progress in reducing net outflows, growth in the ETF business, and strong financial performance. However, challenges remain with continued net outflows, fee compression, and difficulties in generating alpha in a challenging market environment. Overall, the sentiment reflects cautious optimism with ongoing strategic initiatives to address these challenges.Highlights
Reduced Net Outflows
Net outflows for the year were $43.2 billion, a reduction by nearly half year over year and 30% from 2022.
Growth in ETF Business
The ETF business saw significant growth, closing the year with almost $8 billion in assets under management.
Target Date Franchise Leadership
The target date franchise led the industry with net inflows of $16.3 billion for the year.
Positive Net Flows in Fixed Income and Alternatives
Fixed income and alternatives had positive net flows for the fourth quarter and full year.
Strong Financial Performance
Full-year adjusted diluted EPS was $9.33, up 23% from 2023, with Q4 adjusted net revenue of $1.8 billion.
Expansion of Strategic Partnerships
Expanded strategic partnerships providing access to an additional ten thousand financial advisors and two million end clients.
Strong Client Satisfaction Scores
Client satisfaction scores remain strong across client types.
Lowlights
Continued Net Outflows
Despite improvements, the company experienced $43.2 billion in net outflows for the full year.
Fee Rate Compression
The effective fee rate decreased, with higher fee compression observed, driven by a mix shift in assets and strategic choices.
Challenges in Generating Alpha
The market environment made it difficult for strategies to outperform, with only 54% of funds beating their peer group medians for the year.
Specific Strategy Underperformance
Underperformance in several strategies, including mid cap growth, new horizons, dividend growth, and emerging markets equity.
Company Guidance
During the T. Rowe Price Fourth Quarter 2024 earnings call, the company provided guidance highlighting an optimistic outlook for 2025, aiming to reduce net outflows further and potentially return to organic growth. For 2024, T. Rowe Price reported $1.6 trillion in assets under management and $43.2 billion in net outflows, significantly improved from previous years. Key highlights included the growth of their ETF business, which ended the year with nearly $8 billion in AUM, and strong net inflows of $16.3 billion in their target date franchise. The company's adjusted diluted earnings per share for Q4 was $2.12, contributing to a 23% increase in full-year adjusted diluted EPS to $9.33. They also noted a 10.1% increase in full-year adjusted revenue to $7.2 billion, driven by strong equity markets and higher average AUM. T. Rowe Price emphasized its commitment to returning capital to stockholders, with $1.4 billion returned in 2024, and plans to continue prioritizing dividends and potential strategic investments. The guidance also included expectations for 2025 adjusted operating expenses to rise 4 to 6% over 2024, considering real estate costs from moving into new headquarters.T Rowe Price Corporate Events
Financial Disclosures
T. Rowe Price Schedules Earnings Results Discussion
Neutral
Feb 5, 2025
T. Rowe Price will conduct an investor conference call and webcast on February 5, 2025, to discuss its earnings results for the periods ending December 31, 2024. This event aims to provide insights into the company’s financial performance, potentially impacting its operations and stakeholder perspectives.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.