Here's Why You Should Buy Artisan Partners (APAM) Stock Now
Adding Artisan Partners Asset Management Inc. APAM stock to your portfolio now seems to be a wise idea. The company’s diverse investment strategies across multiple asset classes, along with technological and operational capabilities, will continue to support the top-line growth in the upcoming period.
The Zacks Consensus Estimate for APAM’s current-year earnings has been revised nearly 1% upward over the past 60 days, reflecting analysts’ bullish sentiments regarding its earnings growth potential. The company currently carries a Zacks Rank #2 (Buy).
Artisan Partners’ shares have gained 5.6% in the past year compared with the industry’s 31.6% growth.
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Now, let’s discuss a few of the important factors that make APAM stock worth a look.
Solid Organic Growth: The company has been demonstrating an uptrend in its revenue growth over the last few years, with some volatility. In the first quarter of 2024, the metric increased 12.7% year over year. The increase was driven by a rise in management fees earned from Artisan Funds & Artisan Global Funds and Separate accounts.
The company’s diverse product offerings and investment strategies continue to attract investors and are expected to support revenue growth. Focusing on long-term growth, it continues to invest in new teams, and technological and operational capabilities. These strategic initiatives instill confidence in the stock. Our model projects total revenues to rise 11.3%, 7.9% and 7% in 2024, 2025 and 2026, respectively.
Rising AUM: Artisan Partners’ total AUM has been witnessing improvement over the past few years. The company’s efforts to improve and add investment strategies will continue to support AUM's growth. Moreover, a diversified AUM base across equity and fixed-income classes is another positive.
Going forward, an improvement in global equity and debt markets with the stabilization in the economy will likely support AUM, thus aiding top-line growth. Our estimate suggests total AUM to witness a three-year CAGR of 7.6% by 2026.
Solid Balance Sheet Position: As of Mar 31, 2024, the company had borrowings of around $200 million. Cash and cash equivalents, as of the same date, were $184.2 million and the company had $100 million of revolving credit facility. At present, the company has about $155 million of seed capital invested in its Artisan investment products with significant amounts of realizable capacity. As those products begin to scale, it will redeem the seed capital to deploy into new products, otherwise reinvest in the business, or return it to shareholders. Thus, higher cash levels and modest leverage indicate that the company has a decent liquidity position.
Earnings Strength: Over the last three to five years, the company witnessed EPS growth of 2.10%. Its earnings are projected to grow 17.99% in 2024 and 4.40% in 2025 on a year-over-year basis.
Superior Return on Equity (ROE): The company’s ROE of 72.77% compares favorably with the industry’s 13.40%. This shows that it reinvests its cash more efficiently than its peers.
Other Finance Stocks to Consider
Some other top-ranked finance stocks are Bank of Marin Bancorp BMRC and Northrim BanCorp, Inc. NRIM, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bank of Marin Bancorp’s earnings estimates for 2024 have been revised 4.8% upward in the past seven days. BMRC’s shares have gained 8.2% over the past month.
Northrim BanCorp’s 2024 earnings estimates have revised 12.2% upward in the past 60 days. NRIM’s shares have gained 8.3% over the past six months.
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Artisan Partners Asset Management Inc. (APAM) : Free Stock Analysis Report
Northrim BanCorp Inc (NRIM) : Free Stock Analysis Report
Bank of Marin Bancorp (BMRC) : Free Stock Analysis Report
