Envestnet, Inc.’s ENV shares have gained 26.7% year to date compared with a 9.1% rise of the industry and an 18.4% increase of the Zacks S&P 500 composite.

What’s Behind the Rally

ENV put on an impressive earnings performance history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with an average surprise of 6.2%.

Envestnet is focused on increasing its share of the addressable market consisting of enterprise clients in wealth management, financial advisors, financial technology providers and financial institutions through its technology platforms. The company made prudent investments toward enhancing and expanding its technology platforms.

Year-to-Date Price Performance

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ENV continues to focus on improving operational efficiency, increasing market competitiveness, addressing regulatory demands and catering to client-driven requests for new capabilities. Its technology design facilitates significant scalability. ENV’s adjusted EBITDA increased 39% year over year in second-quarter 2024. The adjusted EBITDA margin expanded 440 basis points year over year.

Envestnet’s business model ensures solid asset- and subscription-based recurring revenue-generation capacity. Recurring revenues have displayed consistent growth, with a 2.1% year-over-year increase in 2023, following a rise of 4.5% in 2022 and 20.2% in 2021.

Envestnet's current ratio (a measure of liquidity) at the end of the second quarter was pegged at 1.14, calling for a rise from the year-ago quarter’s 0.73. A current ratio of more than 1 often indicates that the company will be quickly paying off its short-term obligations.

Zacks Rank and Stocks to Consider

ENV currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks from the broader Zacks Business Services sector are Genpact G and Jamf JAMF.

Genpact carries a Zacks Rank of 2 (Buy) at present. It has a long-term earnings growth expectation of 8.4%.G delivered a trailing four-quarter earnings surprise of 6.9%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Jamf currently carries a Zacks Rank of 2. The company has a long-term earnings growth expectation of 57%. JAMF delivered a trailing four-quarter earnings surprise of 15.7%, on average.

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Genpact Limited (G) : Free Stock Analysis Report

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