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Acadian Asset Management (AAMI)
NYSE:AAMI
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Acadian Asset Management
(NYSE:AAMI)
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Rating:69Neutral
Price Target:
$60.00
â–²(9.73% Upside)
Action:ReiteratedDate:03/03/26
The score is driven by strong earnings-call momentum (record AUM/flows, margin expansion, and renewed capital returns) and supportive technical uptrend, partly offset by elevated balance-sheet risk (high leverage/thin equity) and a not-cheap P/E despite an attractive dividend yield.
Positive Factors
Scale & Net Flows
Sustained, large net inflows and record AUM materially strengthen the firm's recurring fee base and distribution scale. A $177.5B AUM platform and multi-quarter positive flows reduce revenue cyclicality, support predictable management fees, and enable long-term investment in product development and client coverage.
Recurring Fees & Margin Leverage
Strong growth in recurring management fees coupled with expanded ENI and operating margins signals durable operating leverage. Consistent fee-led revenue growth converts incremental AUM into higher margins, supporting sustainable profitability even if performance fees are variable over time.
Improved Cash Generation
A material rebound in operating cash flow and closer FCF alignment to earnings in 2025 improves self-funding capacity for technology, seed investments, and capital returns. Stronger cash conversion enhances strategic flexibility and reduces reliance on external financing for growth initiatives.
Negative Factors
High Leverage / Thin Equity
Persistently elevated leverage and historically thin or negative equity constrain financial flexibility and increase solvency sensitivity. A limited equity buffer magnifies earnings or market shocks, restricting the firm's ability to pursue opportunistic investments or maintain capital returns during downturns without raising costly capital.
Volatile Cash Conversion
Pronounced variability in operating and free cash flow complicates multi-year planning for buybacks, dividends, and seed capital. Historical swings mean cash generation is less predictable, raising execution risk for capital allocation and potentially forcing defensive actions if flows or markets reverse.
Performance-Fee & Comp Sensitivity
A material share of revenue and payouts is tied to performance fees and contractual comp ratios. Weakness in performance fees and a higher implied variable comp ratio could reduce net margins and free cash flow, making profitability and shareholder returns sensitive to revenue mix shifts rather than stable management fees.
Acadian Asset Management (AAMI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.92B
Dividend Yield0.08%
Average Volume (3M)224.66K
Price to Earnings (P/E)12.1
Beta (1Y)1.25
Revenue Growth21.53%
EPS Growth42.18%
CountryUS
Employees383
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)1.32
Shares Outstanding35,722,570
10 Day Avg. Volume279,771
30 Day Avg. Volume224,660
Financial Highlights & Ratios
PEG Ratio-11.96
Price to Book (P/B)28.08
Price to Sales (P/S)2.86
P/FCF Ratio9.42
Enterprise Value/Market Cap1.11
Enterprise Value/Revenue3.59
Enterprise Value/Gross Profit3.86
Enterprise Value/Ebitda11.75
Forecast
1Y Price Target
$53.33Price Target Upside-2.47% Downside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)4.23
Revenue Forecast (FY)$716.94M
Acadian Asset Management Business Overview & Revenue Model
Company DescriptionAcadian Asset Management, Inc. is a holding company, which engages in the provision of asset management services. It operates through the Quant and Solutions segment. The Quant and Solutions segment involves leveraging data and technology in a computational, factor-based investment process across a range of asset classes and geographies, including Global, non-U.S., emerging markets, and managed volatility equities, as well as multi-asset products. The company was founded in 1980 and is headquartered in Boston, MA.
How the Company Makes MoneyAcadian Asset Management generates revenue primarily through management fees charged on the assets under management (AUM). These fees are typically calculated as a percentage of AUM and can vary depending on the type of investment strategy employed. Additionally, AAMI may earn performance fees based on the investment returns it generates for its clients, incentivizing the firm to achieve superior performance. The company also benefits from strategic partnerships and collaborations with other financial institutions, which can enhance its distribution capabilities and attract new clients. Other revenue streams may include advisory services and consulting, further diversifying its income sources.
Acadian Asset Management Key Performance Indicators (KPIs)
Acadian Asset Management Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call emphasized multiple record-breaking operational and financial achievements — record AUM (~$177.5B), record annual net client cash flows (~$29.4B), record ENI EPS ($3.25), double-digit growth in management fees (~32% YoY in Q4) and margin expansion — alongside meaningful balance sheet improvements (deleveraging and refinancing) and a reinforced capital return framework (dividend increase, prior buybacks). Lowlights were largely related to non-cash GAAP declines, transient market-driven performance headwinds in H2 2025, modest increases in operating investments, and a short-term pause in buybacks to deleverage. Overall, the positives (strong organic growth, recurring revenue expansion, margin improvement, and capital allocation flexibility) materially outweigh the negatives, which are mostly non-cash or tactical.Q4-2025 Updates
Positive Updates
Record AUM and Strong Net Flows
AUM reached a record high of $177.5B (nearly $178B) as of Dec 31, 2025. Q4 2025 net client cash flows were $5.4B (3% of beginning period AUM). Full-year 2025 net client cash flows were ~$29.4B (record annual NCCF). Eight consecutive quarters of positive net flows.
Record ENI Revenue, EPS and Margin Expansion
2025 ENI total revenue grew to nearly $549M, up 9% YoY. Record annual ENI EPS for 2025 was $3.25, up 18% YoY. ENI margin expanded to 35.5% for the year; Q4 2025 ENI operating margin expanded 338 bps to 45.7% (from 42.3% in Q4 2024).
Record Quarterly Management Fees and Recurring Revenue Growth
Q4 2025 management fees grew ~32% YoY to a record level (reported as $140M on slide 10 and summarized as $146M on the recap), driven by a 43% increase in average AUM from strong net flows and market appreciation. Company delivered ~8%+ quarter-on-quarter management fee growth for three consecutive quarters.
Improved Profitability and Adjusted EBITDA Growth
Adjusted EBITDA increased 1% in Q4 and +9% for full-year 2025 versus 2024, driven by growth in recurring management fees and operating leverage; Q4 operating expense ratio improved to 40.9% and enabled margin expansion.
Strong Long-Term Investment Performance
Revenue-weighted 5-year annualized alpha was 4.7% in excess of benchmark; asset-weighted 5-year alpha was 3.8%. By revenue weight, 95% of strategies outperformed benchmarks across 3-, 5-, and 10-year periods; by asset weight, 91% outperformed.
Balance Sheet Strength and Deleveraging
Refinanced senior notes, reducing gross debt by $75M and lowering gross leverage to 1.0x (from 1.5x) and net leverage to 0.5x. Ended year with $101M cash, $97M seed investments, $200M drawn on Term Loan A, and zero on revolver; leverage profile improved and provides flexibility.
Shareholder Returns and Capital Allocation Progress
Outstanding diluted shares down 58% since Q4 2019 (86M → 35.8M). Repurchased 1.8M shares in 2025 (~$48M, ~5% reduction YoY). Board declared a quarterly dividend of $0.10 per share (up from $0.00), signaling confidence in free cash flow and intent to return capital.
Robust, Diverse Pipeline and Product Demand
Management described a robust, diverse pipeline across products/geographies/vehicles. Continued client interest in enhanced strategies, extensions, and renewed interest in emerging markets (EM) strategies contributed to flows and outlook.
Negative Updates
GAAP Net Income and EPS Declines (Non-Cash Driven)
US GAAP net income attributable to controlling interest declined 18% in Q4 2025 (and 6% for full-year 2025). GAAP EPS was down 14% in Q4 and down 0.5% for the year, primarily due to increased non-cash expenses from changes in the valuation of Acadian LLC equity and profit interest.
Performance Fee Weakness and Revenue Mix Impact
Total ENI revenue growth in Q4 was modest (+2% YoY) despite strong management fee growth, as recurring fee gains were partially offset by a decline in performance fees, reducing near-term variable compensation tied to performance fees.
Higher Operating Costs and Increased Investments
Q4 2025 ENI operating expenses increased 5% YoY, driven by higher sales-based compensation and G&A including IT, infrastructure, and continued investments in data/AI and systematic credit capability expansion.
Market Environment Challenges for Systematic Signals
Crowding into lower-quality, high-beta stocks in H2 2025 created a challenging environment for Acadian’s quality- and value-oriented systematic signals, which weighed on performance through parts of the year (noted particularly in Q3); performance improved in Q4.
Pause in Share Repurchases During Deleveraging
Share repurchases were suspended in Q4 2025 to support deleveraging after the refinancing. Although management signals repurchases will be a priority going forward, the pause temporarily reduced one avenue of capital return.
Variable Compensation Ratio Pressure for 2026
Q4 variable compensation fell 18% YoY and the Q4 variable comp ratio declined to 29.4% (from 35.7%), but contractual allocations imply a potential 2026 variable compensation ratio of ~40–43%, higher than full-year 2025 (39.4%), which could increase comp-related cash outflows if revenue mix persists.
GAAP vs ENI Disconnect and Non-Cash Volatility
Significant divergence between GAAP and ENI metrics due to non-cash valuation changes increases volatility in GAAP results and may complicate near-term earnings comparability for investors.
Company Guidance
The company guided to continued positive momentum into 2026, citing a robust pipeline and expectations for sustained net inflows after Q4 net client cash flows of $5.4 billion (3% of beginning AUM) and record 2025 net flows of about $29.4 billion that helped AUM hit a record $177.5 billion; management emphasized it will continue to generate strong free cash flow and return capital (interim dividend raised to $0.10/share and share repurchases to be re‑activated after a pause). Financial posture entering 2026 includes FY2025 ENI revenue near $549 million (+9%), record ENI EPS of $3.25 (+18%) and Q4 ENI EPS $1.32, expanded Q4 ENI operating margin of 45.7% (up 338 bps) and FY ENI margin 35.5%, adjusted EBITDA up 9% for the year, gross leverage reduced to 1.0x (net 0.5x), cash of $101M plus $97M seed investments, a $200M term loan balance, and an anticipated 2026 variable compensation ratio of ~40–43% assuming similar revenue mix; targeted ongoing investments include systematic credit, technology and data/AI while aiming to self‑fund growth and maintain disciplined capital returns.Acadian Asset Management Financial Statement Overview
Summary
Operating performance is improving (steady 2022–2025 revenue growth, normalized mid-teens net margins, and a strong 2025 operating/free-cash-flow rebound), but the balance sheet is a major constraint: very high leverage and thin/previously negative equity materially reduce financial flexibility and increase downside risk.Income Statement
Revenue has expanded steadily from 2022–2025 (2025 revenue up ~6% year over year), showing improving business momentum. Profitability is generally solid for the period, with 2023–2025 net margins in the mid-teens and operating margins holding up well. That said, results are somewhat volatile: 2022 saw a revenue decline, and 2020–2021 show unusually high margins and net income levels that appear non-recurring versus the more normalized profile in 2023–2025.72
Positive
Balance Sheet
Leverage is the key constraint. Debt remains sizable while equity is thin, driving very high debt-to-equity in the most recent years (2024–2025) and even negative equity in 2021–2022, which signals a weaker capital cushion. While total debt has edged down modestly since 2020, the overall balance sheet remains highly leveraged and more exposed to market/earnings swings than peers with stronger equity buffers.38
Negative
Cash Flow
Cash generation improved meaningfully in 2025, with operating cash flow rebounding strongly and free cash flow closely tracking reported earnings, indicating decent earnings quality in the latest year. However, cash flow has been choppy historically (including negative operating and free cash flow in 2021), and free cash flow growth is extremely volatile—most notably a sharp swing in 2025 versus 2024—suggesting uneven conversion and variability in underlying drivers.66
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 594.30M | 505.60M | 426.60M | 417.20M | 523.80M |
| Gross Profit | 552.00M | 239.20M | 213.20M | 257.60M | 239.20M |
| EBITDA | 181.50M | 163.60M | 133.40M | 183.90M | 225.10M |
| Net Income | 80.00M | 85.00M | 65.80M | 100.60M | 828.40M |
Balance Sheet | |||||
| Total Assets | 677.00M | 703.20M | 611.40M | 518.70M | 714.80M |
| Cash, Cash Equivalents and Short-Term Investments | 101.20M | 94.80M | 146.80M | 108.40M | 252.10M |
| Total Debt | 322.80M | 341.60M | 346.30M | 349.30M | 472.50M |
| Total Liabilities | 593.00M | 616.10M | 561.90M | 540.30M | 732.40M |
| Stockholders Equity | 60.60M | 20.00M | 40.20M | -21.60M | -17.60M |
Cash Flow | |||||
| Free Cash Flow | 180.70M | 45.90M | 54.50M | 100.70M | -26.60M |
| Operating Cash Flow | 192.60M | 55.80M | 68.30M | 116.80M | -11.50M |
| Investing Cash Flow | -38.00M | -50.10M | -43.90M | -13.00M | 1.04B |
| Financing Cash Flow | -129.20M | -54.40M | 1.80M | -233.70M | -1.18B |
Acadian Asset Management Technical Analysis
Positive
54.68
Price Trends
52.20
Positive
49.03
Positive
44.81
Positive
Market Momentum
0.70
Negative
55.34
Neutral
56.19
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AAMI, the sentiment is Positive. The current price of 54.68 is above the 20-day moving average (MA) of 52.93, above the 50-day MA of 52.20, and above the 200-day MA of 44.81, indicating a bullish trend. The MACD of 0.70 indicates Negative momentum. The RSI at 55.34 is Neutral, neither overbought nor oversold. The STOCH value of 56.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AAMI.
Acadian Asset Management Risk Analysis
Acadian Asset Management disclosed 1 risk factors in its most recent earnings report. Acadian Asset Management reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Acadian Asset Management Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.48B | 15.68 | 26.64% | 0.95% | 12.05% | 120.13% | |
69 Neutral | $1.92B | 12.09 | 7024.00% | 0.08% | 21.53% | 42.18% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $2.50B | 25.54 | 3.23% | 3.21% | 21.37% | 17.19% | |
59 Neutral | $1.68B | 12.06 | 10.61% | 9.64% | -6.44% | -1.18% | |
55 Neutral | $935.50M | 8.05 | 15.07% | 5.41% | -3.07% | 18.00% |
* Financial Sector Average
AAMI
Acadian Asset Management
54.68
30.55
126.59%
BBT
Beacon Financial Corporation
30.08
4.37
17.00%
VRTS
Virtus Investment Partners
140.60
-30.86
-18.00%
WT
WisdomTree
17.50
8.94
104.53%
TSLX
Sixth Street Specialty Lending
18.48
-1.88
-9.22%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.