Shares of LPL Financial LPLA gained almost 1% in after-market hours on better-than-expected fourth-quarter 2024 results. Its adjusted earnings of $4.25 per share handily outpaced the Zacks Consensus Estimate of $3.92. The bottom line also reflected year-over-year growth of 21.1%.

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Results benefited from robust revenue improvement, partly offset by higher expenses. LPLA recorded growth in brokerage and advisory assets, which acted as a tailwind.

After considering certain non-recurring items, net income was $270.4 million or $3.59 per share, up from $217.6 million or $2.85 per share in the prior-year quarter. Our estimate for net income was $255.1 million.

For 2024, adjusted earnings per share were $16.51, up 5% year over year. The figure surpassed the Zacks Consensus Estimate of $16.17. Net income (GAAP) was $1.06 billion compared with $1.07 billion in 2023. Our estimate for net income was $1.04 billion.

LPLA’s Revenues Improve, Expenses Rise

Total net revenues of $3.51 billion surged 32.9% year over year. The top line beat the Zacks Consensus Estimate of $3.35 billion.

Full-year net revenues were $12.39 billion, up 23.2% year over year. The top line surpassed the Zacks Consensus Estimate of $12.13 billion.

Total expenses jumped 34.9% to $3.17 billion. The rise was due to an increase in all cost components except for other expenses. Our estimate for total expenses was $2.90 billion.

As of Dec. 31, 2024, LPL Financial’s total brokerage and advisory assets were $1,740.7 billion, up 28.6%. In the reported quarter, total net new assets were $157.3 billion, up from $24.7 billion in the prior-year quarter.

Total client cash balances rose 14.3% year over year to $55.1 billion.

LPLA’s Balance Sheet Position Solid

As of Dec. 31, 2024, total assets were $13.32 billion, up 11.5% on a sequential basis. As of the same date, cash and cash equivalents totaled $967.1 million, down from $1.47 billion.

Total stockholders’ equity was $2.93 billion as of Dec. 31, 2024, up 5.7% sequentially.

Update on LPL Financial’s Share Repurchases

In the reported quarter, the company repurchased $100 million worth of shares.

The company intends to repurchase another $100 million worth of shares in the first quarter of 2025.

Our View on LPL Financial

LPL Financial’s recruiting efforts and solid advisor productivity will likely continue aiding advisory revenues. Strategic acquisitions and a strong balance sheet will keep supporting financials. However, rising expenses and uncertainty regarding capital markets are likely to impact commission revenues adversely.

Currently, LPL Financial carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of LPLA’s Peers

Charles Schwab’s SCHW fourth-quarter 2024 adjusted earnings of $1.01 per share beat the Zacks Consensus Estimate of 90 cents. The bottom line jumped 49% year over year.

SCHW’s results benefited from the solid performance of the asset management business, which drove revenues. Also, higher net interest revenues acted as a tailwind. The absence of fee waivers, lower GAAP expenses and solid brokerage account numbers were other positives.
 
Interactive Brokers Group’s IBKR fourth-quarter 2024 adjusted earnings per share of $2.03 beat the Zacks Consensus Estimate of $1.86. The bottom line indicates a jump of 33.6% from the prior-year quarter’s reported actuals.

The results were primarily aided by an increase in revenues. The company recorded growth in customer accounts in the quarter, which, along with a rise in daily average revenue trades, was another tailwind. However, higher expenses hurt the results to some extent for IBKR.

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