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T Rowe Price (TROW)
NASDAQ:TROW
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T Rowe Price
(NASDAQ:TROW)
Rating:78Outperform
Price Target:
$108.00
▲( 13.58% Upside)
Positive Factors
Partnerships
TROW announced a new insurance partnership with ARES’s insurance partner (Aspida), with TROW/OHA managing public/private credit for a portion of Aspida’s balance sheet. This win could lead to new partnerships for TROW in the future.
Revenue Performance
Better revenue and other items partially offset the impact of elevated expenses for T. Rowe Price Group.
Target Date Funds
Momentum in ETFs and target date funds is promising, with well-flowed performance in Jan and Feb'25.
Negative Factors
Net Outflows
TROW reported $8.6B in outflows for 1Q25, including $0.7B of manager-driven distributions.
Operating Expenses
Higher operating expenses have led to a reduction in the earnings estimate for T. Rowe Price Group.
Stock Market Weakness
TROW's emphasis on growth-equity exposures has been a relative headwind due to March's stock market weakness.
T Rowe Price (TROW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$21.39B
Dividend Yield5.14%
Average Volume (3M)2.19M
Price to Earnings (P/E)11.0
Beta (1Y)1.32
Revenue Growth6.51%
EPS Growth4.52%
CountryUS
Employees8,084
SectorFinancial
Sector Strength82
IndustryAsset Management
Share Statistics
EPS (TTM)2.23
Shares Outstanding220,316,090
10 Day Avg. Volume1,432,739
30 Day Avg. Volume2,189,398
Financial Highlights & Ratios
PEG Ratio-2.78
Price to Book (P/B)1.99
Price to Sales (P/S)0.00
P/FCF Ratio15.98
Enterprise Value/Market Cap0.84
Enterprise Value/Revenue0.65
Enterprise Value/Gross Profit4.85
Enterprise Value/Ebitda1.63
Forecast
1Y Price Target
$91.36Price Target Upside-3.92% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering11
T Rowe Price Business Overview & Revenue Model
Company DescriptionT. Rowe Price Group, Inc. (TROW) is a global investment management firm headquartered in Baltimore, Maryland. The company provides a broad array of mutual funds, subadvisory services, and separate account management for individual and institutional investors, retirement plans, and financial intermediaries. T. Rowe Price operates in the financial services sector with a focus on delivering investment insights and solutions across a wide range of asset classes, including equities, fixed income, and alternative investments.
How the Company Makes MoneyT. Rowe Price generates revenue primarily through investment advisory fees, which are based on a percentage of assets under management (AUM). The company's core revenue streams include fees from mutual funds, investment advisory services for institutional clients, and subadvisory services for other financial entities. These fees are typically charged on a daily basis but are accrued and billed monthly or quarterly. T. Rowe Price also earns revenue from administrative and distribution fees related to its mutual funds. The company's earnings are influenced by factors such as market performance, net asset inflows or outflows, and the overall growth in assets under management. While T. Rowe Price does not rely heavily on significant partnerships, its reputation and performance history play a critical role in maintaining and expanding its client base.
T Rowe Price Financial Statement Overview
Summary
T Rowe Price demonstrates strong financial health across all metrics, with high profitability margins, minimal leverage, and robust cash flows. While revenue growth is modest, the company's efficient operations and financial management ensure stability and resilience. The low debt levels reduce financial risk, making the company's financial outlook positive.Income Statement
The company exhibits solid financial performance with a TTM (Trailing-Twelve-Months) gross profit margin of 64.23% and a net profit margin of 28.22%. Revenue growth is relatively flat, with a modest increase from the previous year. EBIT and EBITDA margins are strong at 32.96% and 36.76%, respectively, indicating efficient operations and robust profitability.85
Very Positive
Balance Sheet
T Rowe Price maintains a healthy balance sheet with a low debt-to-equity ratio of 0.045, reflecting minimal leverage and financial risk. The return on equity stands at a commendable 19.29%, highlighting effective use of shareholders' funds. The equity ratio is strong at 74.29%, underscoring a solid financial position and asset base.88
Very Positive
Cash Flow
The cash flow position is robust, with a TTM free cash flow growth of 1.27% and a strong operating cash flow to net income ratio of 0.87, indicating healthy cash generation. The free cash flow to net income ratio is 0.64, reflecting efficient capital expenditure management. Overall, the cash flow indicates stability and operational efficiency.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 7.11B | 7.09B | 6.46B | 6.49B | 7.67B | 6.21B | Gross Profit |
| 3.72B | 3.68B | 3.21B | 3.57B | 4.68B | 3.59B | EBIT |
| 2.34B | 2.33B | 1.99B | 2.37B | 3.71B | 2.75B | EBITDA |
| 2.71B | 2.33B | 2.52B | 3.14B | 3.91B | 2.94B | Net Income Common Stockholders |
| 2.01B | 2.10B | 1.79B | 1.56B | 3.08B | 2.37B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.84B | 2.65B | 2.07B | 1.76B | 1.52B | 2.15B | Total Assets |
| 13.99B | 13.47B | 12.28B | 11.64B | 12.52B | 10.66B | Total Debt |
| 472.10M | 278.70M | 397.90M | 329.60M | 249.20M | 154.10M | Net Debt |
| -2.36B | -2.37B | -1.67B | -1.43B | -1.27B | -2.00B | Total Liabilities |
| 2.46B | 2.02B | 1.99B | 1.96B | 2.26B | 1.39B | Stockholders Equity |
| 10.39B | 10.35B | 9.51B | 8.84B | 9.02B | 7.71B |
| Cash Flow | Free Cash Flow | ||||
| 1.28B | 1.26B | 911.20M | 2.12B | 3.21B | 1.70B | Operating Cash Flow |
| 1.74B | 1.69B | 1.22B | 2.36B | 3.45B | 1.92B | Investing Cash Flow |
| -190.60M | -177.50M | -527.20M | -41.50M | -1.10B | -36.30M | Financing Cash Flow |
| -1.08B | -936.60M | -1.08B | -2.08B | -2.99B | -1.49B |
T Rowe Price Technical Analysis
Negative
95.09
Price Trends
91.08
Positive
99.68
Negative
104.45
Negative
Market Momentum
1.94
Negative
55.49
Neutral
75.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TROW, the sentiment is Negative. The current price of 95.09 is above the 20-day moving average (MA) of 92.99, above the 50-day MA of 91.08, and below the 200-day MA of 104.45, indicating a neutral trend. The MACD of 1.94 indicates Negative momentum. The RSI at 55.49 is Neutral, neither overbought nor oversold. The STOCH value of 75.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TROW.
T Rowe Price Risk Analysis
T Rowe Price disclosed 33 risk factors in its most recent earnings report. T Rowe Price reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
Our alternatives products include investments in private credit, real estate, and equity investments in private companies, which may expose us to new or increased risks and liabilities and to reputational harm. Q4, 2024
2.
The recent advancements in and increased use of artificial intelligence (AI) present risks and challenges that may adversely impact our business. Q4, 2024
3.
We may be adversely affected by increased governmental and regulatory scrutiny or negative publicity. Q4, 2024
T Rowe Price Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $21.39B | 11.02 | 19.47% | 5.14% | 6.51% | 4.52% | |
73 Outperform | $20.88B | 10.02 | 17.54% | 2.79% | 21.00% | 137.62% | |
70 Outperform | $16.87B | 15.78 | 20.38% | 3.00% | 62.87% | ― | |
69 Neutral | $18.10B | 26.22 | 5.84% | 2.83% | -23.47% | -67.03% | |
67 Neutral | $11.67B | 32.17 | 2.84% | 5.68% | 7.02% | -60.38% | |
65 Neutral | $27.87B | 10.98 | 11.21% | 3.04% | 15.02% | 66.71% | |
64 Neutral | $12.78B | 9.87 | 7.67% | 17015.06% | 12.34% | -5.99% |
* Financial Sector Average
Performance Comparison
TROW
T Rowe Price
95.09
-16.48
-14.77%
BEN
Franklin Resources
21.61
-0.15
-0.69%
STT
State Street
95.53
23.24
32.15%
CG
Carlyle Group
43.85
1.17
2.74%
NTRS
Northern
105.34
25.10
31.28%
CRBG
Corebridge Financial, Inc.
31.71
2.31
7.86%
T Rowe Price Earnings Call Summary
Earnings Call Date:May 02, 2025
(Q1-2025)
| % Change Since: 7.91%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced outlook with strong investment performance and international expansion being offset by earnings decline, net outflows, and challenges in alternative portfolios. The firm is making strides in ETFs and global retirement offerings, but faces market volatility and mixed results in certain areas.Q1-2025 Updates
Positive Updates
Strong Investment Performance
Over 60% of T. Rowe Price funds beat their peer groups across the one, three, five, and ten-year time periods, with equity value outperforming growth.
Leadership in Retirement Expansion
T. Rowe Price expanded its retirement offerings internationally, partnering with firms in Japan, Korea, and Canada, and being selected by a global banking institution to develop retirement-related funds.
ETFs and SMA Offerings Growth
Launched two new ETFs and broadened SMA offerings, with ETFs reaching over $12.5 billion in AUM and three ETFs surpassing $1 billion.
Recognition and Awards
Named one of Fortune Magazine's World's Most Admired Companies for the 15th consecutive year and received other industry accolades.
Consistent Dividend Increase
Quarterly dividend increased for the 39th consecutive year.
Negative Updates
Decline in Adjusted Earnings Per Share
Adjusted EPS of $2.23 for Q1 2025 decreased from $2.38 in Q1 2024.
Net Outflows
Experienced $8.6 billion in net outflows, driven largely by U.S. equities and rebalancing activity.
Challenges in Alternative Portfolios
Alternative portfolios produced mixed results, with some negative developments in certain positions and muted capital deployment in private lending funds.
Equity Market Headwinds
Equity assets under management declined from 52% to 49% of AUM in the quarter, affecting fee rates.
Company Guidance
During T. Rowe Price's First Quarter 2025 Earnings Conference Call, the company provided guidance on various performance metrics and strategic initiatives. The firm reported an improvement in investment performance, with over 60% of its funds outperforming their peer groups across one, three, five, and ten-year periods. Specifically, 61% of funds outperformed on a one-year basis, 73% on a three-year basis, 68% on a five-year basis, and 87% on a ten-year basis. The target date assets showed strong results, with 99% beating their peer groups across three, five, and ten-year periods. Fixed income performance was also solid, with 64% of funds outperforming on a one-year basis and 65% on a five-year basis. The firm highlighted strategic expansions in global retirement markets, launching a sub-advised retirement date fund series in Japan and partnering with a global banking institution for custom retirement funds in Asia, the UK, and the Middle East. T. Rowe Price also emphasized its focus on ETFs, now managing 19 funds with over $12.5 billion in assets. The company's financials showed adjusted earnings per share of $2.23, a decrease from $2.38 in the prior year, amid $8.6 billion in net outflows, primarily driven by rebalancing and U.S. equities. The balance sheet remains robust, with $3.3 billion in cash and discretionary investments, and the company continues prioritizing shareholder returns, announcing a quarterly dividend of $1.27, marking the 39th consecutive annual increase.T Rowe Price Corporate Events
Executive/Board ChangesShareholder Meetings
T. Rowe Price Stockholders Meeting Approves Key Proposals
Neutral
May 12, 2025
T. Rowe Price held its annual stockholders meeting on May 8, 2025, where several key proposals were voted on. The election of directors saw most nominees receiving strong support, while a proposal for a shareholder approval requirement for excessive golden parachutes was largely rejected. Additionally, the compensation for named executive officers was approved, and KPMG LLP was ratified as the independent registered public accounting firm for 2025.
The most recent analyst rating on (TROW) stock is a Sell with a $107.00 price target. To see the full list of analyst forecasts on T Rowe Price stock, see the TROW Stock Forecast page.
Financial Disclosures
T Rowe Price to Discuss Q1 2025 Earnings
Neutral
May 2, 2025
On May 2, 2025, T Rowe Price will hold an investor conference call and webcast to discuss its earnings results for the first quarter of 2025. The company has provided supplemental materials for the earnings call, but it does not commit to updating this information, which may impact stakeholder expectations and market perceptions.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.