Federated Hermes (FHI) AI Stock Analysis

• Market Cap: $3.84B
• Dividend Yield: 2.59%
• Average Volume (3M): 529.26K
• Price to Earnings (P/E): 10.4
• Beta (1Y): 0.53
• Revenue Growth: 9.32%
• EPS Growth: 53.51%
• Country: US
• Employees: 2,000
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 1.34
• Shares Outstanding: 77,537,865
• 10 Day Avg. Volume: 661,019
• 30 Day Avg. Volume: 529,258
• PEG Ratio: -2.43
• Price to Book (P/B): 2.98
• Price to Sales (P/S): 2.00
• P/FCF Ratio: 9.53
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 2.14
• Enterprise Value/Gross Profit: 3.09
• Enterprise Value/Ebitda: 7.13
• 1Y Price Target: $53.75
• Price Target Upside: 7.05% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 4.85
• Revenue Forecast (FY): $1.74B

• Rating: 68 Neutral
• Price Target: $53.00 ▲(5.56% Upside)

Federated Hermes' overall stock score is driven by strong financial performance and attractive valuation metrics. The earnings call provided a balanced view of growth and challenges, supporting a positive outlook. However, technical analysis indicates bearish momentum, which tempers the overall score.

Positive Factors

Record Assets Under Management

Achieving record AUM indicates strong client trust and effective investment strategies, enhancing revenue potential through management fees.

Innovative Digital Asset Initiatives

Digital asset initiatives demonstrate commitment to innovation, potentially attracting tech-savvy investors and opening new revenue streams.

FCP Acquisition

Entering the U.S. real estate market through FCP acquisition diversifies revenue sources and expands market presence, enhancing long-term growth.

Negative Factors

Equity Net Sales Slightly Negative

Negative equity net sales indicate potential client dissatisfaction or market challenges, which could impact future revenue stability.

Alternative Private Markets Decline

Decline in alternative markets suggests restructuring challenges, potentially affecting diversification and revenue from this segment.

FX and Related Expenses Increase

Rising FX expenses can erode profitability, indicating exposure to currency fluctuations that may impact financial performance.

Federated Hermes Business Overview & Revenue Model

Company Description

Federated Hermes, Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides its services to individuals, including high net worth individuals, banking or thrift institutions, investment companies, pension and profit sharing plans, pooled investment vehicles, charitable organizations, state or municipal government entities, and registered investment advisors. Through its subsidiaries, it manages separate client-focused equity, fixed income, balanced and money market mutual funds along with separate client-focused equity, fixed income, money market, and balanced portfolios. Through its subsidiaries, the firm invests in the public equity and fixed income markets across the globe. It invests in growth and value stocks of small-cap, mid-cap, and large-cap companies. The firm makes its fixed income investments in ultra-short, short-term, and intermediate-term mortgage-backed, U.S. Government, U.S. corporate, high yield, and municipal securities. It employs both fundamental and quantitative analysis to make its equity investments. Federated Hermes, Inc. was founded in 1955 and is based in Pittsburgh, Pennsylvania with additional offices in New York City and London, United Kingdom.

How the Company Makes Money

Federated Hermes generates revenue primarily through investment management fees charged to clients for managing their assets. These fees are typically based on a percentage of the assets under management (AUM), which can fluctuate with market conditions and client inflows or outflows. Additionally, the company earns performance fees when investment returns exceed certain benchmarks. Federated Hermes also benefits from revenue generated through its money market fund offerings, which provide liquidity and short-term investment options for clients. Significant partnerships with institutional investors and financial advisors enhance its distribution capabilities and client base, contributing to the company's overall earnings. Moreover, the firm's commitment to ESG investing attracts a growing segment of clients who prioritize sustainable investment practices, potentially leading to increased AUM and associated fee income.

Federated Hermes Financial Statement Overview

Summary

Federated Hermes demonstrates strong profitability and effective equity utilization, with consistent revenue growth. The balance sheet is stable, though there is a moderate reliance on debt. Cash flow management shows some areas for improvement, particularly in free cash flow growth. Overall, the company is financially sound but should monitor cost pressures and cash flow trends.

Income Statement

Federated Hermes shows a consistent revenue growth trend with a TTM growth rate of 3.63%. The company maintains strong profitability with a TTM net profit margin of 21.98% and an EBIT margin of 21.61%. However, the gross profit margin has decreased significantly in the TTM period compared to previous years, indicating potential cost pressures.

Balance Sheet

The company's balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.29 in the TTM period. Return on equity is robust at 31.72%, showcasing effective use of equity. However, the equity ratio indicates a moderate reliance on debt, which could pose risks if not managed carefully.

Cash Flow

Cash flow analysis reveals a slight decline in free cash flow growth in the TTM period, down by 6.71%. The operating cash flow to net income ratio is stable at 1.03, indicating good cash generation relative to earnings. However, the decline in free cash flow growth suggests potential challenges in cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.74B	1.63B	1.61B	1.45B	1.30B	1.45B
Gross Profit	1.20B	1.09B	1.05B	933.10M	767.96M	944.87M
EBITDA	522.00M	416.70M	427.60M	396.40M	396.28M	448.08M
Net Income	380.98M	268.31M	298.98M	239.50M	270.29M	326.36M
Balance Sheet
Total Assets	2.18B	2.08B	2.10B	2.02B	2.02B	2.06B
Cash, Cash Equivalents and Short-Term Investments	506.28M	641.04M	560.67M	521.75M	426.67M	438.77M
Total Debt	460.85M	461.97M	457.94M	452.78M	346.07M	212.77M
Total Liabilities	931.47M	933.96M	947.75M	912.97M	840.97M	686.86M
Stockholders Equity	1.19B	1.10B	1.13B	1.05B	1.11B	1.14B
Cash Flow
Free Cash Flow	262.34M	342.53M	303.92M	319.58M	159.96M	359.74M
Operating Cash Flow	262.85M	346.55M	311.83M	323.95M	170.38M	373.24M
Investing Cash Flow	29.30M	64.25M	-30.61M	-32.36M	10.82M	-24.82M
Financing Cash Flow	-165.67M	-286.40M	-243.09M	-168.51M	-249.47M	-295.14M

Federated Hermes Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 50.21
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FHI, the sentiment is Positive. The current price of 50.21 is below the 20-day moving average (MA) of 50.28, below the 50-day MA of 51.65, and above the 200-day MA of 44.60, indicating a neutral trend. The MACD of -0.79 indicates Negative momentum. The RSI at 49.41 is Neutral, neither overbought nor oversold. The STOCH value of 66.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FHI.

Federated Hermes Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AB	76 Outperform	$3.57B	12.92	19.77%	8.76%	―	-12.92%
VCTR	76 Outperform	$4.11B	15.19	15.59%	3.02%	19.81%	12.83%
GBDC	71 Outperform	$3.75B	9.94	9.33%	11.73%	32.19%	-13.72%
CNS	71 Outperform	$3.43B	21.09	31.53%	3.52%	12.73%	19.01%
APAM	69 Neutral	$3.52B	12.15	62.04%	8.08%	5.46%	2.10%
FHI	68 Neutral	$3.84B	10.37	32.06%	2.59%	9.32%	53.51%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Federated Hermes Corporate Events

Federated Hermes to Acquire Stake in FCP Fund Manager

On October 23, 2025, Federated Hermes, Inc. announced an agreement to acquire an 80% stake in FCP Fund Manager, L.P., a U.S.-based real estate investment manager with $3.8 billion in assets. This acquisition, expected to close in the first half of 2026, will enhance Federated Hermes’ private markets and real estate capabilities in the U.S., complementing its existing operations in the U.K. The transaction, valued at up to $331 million, will be funded through cash and stock, with potential contingent consideration based on financial performance. This move aligns with Federated Hermes’ strategy to expand its private markets offerings and capitalize on growth opportunities in the U.S. multifamily sector.

The most recent analyst rating on (FHI) stock is a Buy with a $58.00 price target. To see the full list of analyst forecasts on Federated Hermes stock, see the FHI Stock Forecast page.

Federated Hermes Maintains Stable Risk Profile: No New Threats Detected

Federated Hermes, Inc. continues to face the same risk factors as previously reported in their Annual Report on Form 10-K for the year ending December 31, 2024. This indicates that the company has not identified any new significant risks or changes to existing risks that could impact its financial performance or operations. Stakeholders should remain vigilant and consider these persistent risks when evaluating the company’s future prospects. The absence of new material changes suggests stability in the company’s risk profile, but ongoing monitoring is essential.