It has been about a month since the last earnings report for Affiliated Managers Group (AMG). Shares have added about 3.9% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Affiliated Managers due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Affiliated Managers' Q3 Earnings Meet Estimates, AUM Balance Improves

Affiliated Managers’ third-quarter 2024 economic earnings of $4.82 per share were in line with the Zacks Consensus Estimate. The bottom line also grew 18.1% from the prior-year number.

An improvement in the AUM balance was positive. Further, the company had a robust liquidity position. However, lower revenues and a rise in expenses were the undermining factors.

Economic net income was $153.2 million, up 2.5% year over year. Our estimate for this metric was $150.2 million.

Revenues Fall, Expenses Rise

Quarterly total revenues declined 1.7% year over year to $516.4 million. Also, the top line missed the Zacks Consensus Estimate of $521.4 million.

Adjusted EBITDA was $214.1 million, up 2.7%. We projected the metric to be $212.9 million.

Total consolidated expenses rose 4.8% to $374.7 million. We had projected total expenses of $360.4 million.

AUM Rises

As of Sept. 30, 2024, the total AUM was $728.4 billion, which grew 14.6%. Our estimate for total AUM was $699.5 million.

Net client cash outflows were $2.9 billion in the reported quarter.

Capital & Liquidity Position Decent

As of Sept. 30, 2024, Affiliated Managers had $1.01 billion in cash and cash equivalents compared with $813.6 million as of Dec. 31, 2023. The company had $2.62 billion of debt, down from $2.54 billion as of Dec. 31, 2023.

Stockholders’ equity as of Sept. 30, 2024, was $3.32 billion, down from $3.59 million as of Dec. 31, 2023.

Update on Share Repurchases

During the third quarter, Affiliated Managers repurchased shares worth $103 million.

Fourth-Quarter 2024 Outlook

Management expects adjusted EBITDA in the $260-$270 million range based on the current AUM levels and net performance fee earnings of roughly $50 million.

Interest expenses are expected to be $34 million. Controlling interest depreciation is likely to be $2 million.

Net income (controlling interest) is expected to be between $142 million and $149 million. The company’s share of reported amortization and impairments is anticipated to be $27 million.

Intangible-related deferred taxes are projected to be $16 million. Other economic items, which now include realized gains, are anticipated to be roughly $1 million.

Economic net income (controlling interest) is projected in the range of $186-$193 million.

Economic EPS is expected to be between $5.94 and $6.17.

The adjusted weighted average share count is estimated to be $31.3 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -13.23% due to these changes.

VGM Scores

Currently, Affiliated Managers has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Affiliated Managers has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Affiliated Managers is part of the Zacks Financial - Investment Management industry. Over the past month, Ameriprise Financial Services (AMP), a stock from the same industry, has gained 10.1%. The company reported its results for the quarter ended September 2024 more than a month ago.

Ameriprise reported revenues of $4.35 billion in the last reported quarter, representing a year-over-year change of +11.1%. EPS of $8.83 for the same period compares with $7.68 a year ago.

For the current quarter, Ameriprise is expected to post earnings of $9.14 per share, indicating a change of +17.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.1% over the last 30 days.

Ameriprise has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.

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