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T Rowe Price (TROW)
NASDAQ:TROW
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T Rowe Price
(NASDAQ:TROW)
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Rating:77Outperform
Price Target:
$123.00
â–²(16.05% Upside)
T Rowe Price's overall stock score is driven by its strong financial performance and favorable valuation. The company's solid profitability and low leverage enhance its financial stability. Positive technical indicators suggest potential for upward price movement. However, challenges such as declining revenue growth and significant equity outflows from the earnings call temper the overall score.
Positive Factors
Strategic Partnership
The collaboration with Goldman Sachs enhances T. Rowe Price's product offerings, particularly in retirement solutions, and provides access to private markets, strengthening its competitive position and market reach.
Strong Balance Sheet
A strong balance sheet with low leverage enhances financial stability and provides flexibility for strategic investments and weathering economic downturns.
ETF Growth
The significant growth in ETF inflows indicates successful expansion in a key investment product segment, enhancing revenue potential and market presence.
Negative Factors
Equity Outflows
Significant equity outflows can reduce assets under management, impacting revenue from management fees and indicating potential client dissatisfaction or market challenges.
Declining Revenue Growth
A decline in revenue growth suggests challenges in attracting new business or retaining existing clients, which could affect long-term profitability and market competitiveness.
Expense Growth Challenges
Rising expenses, particularly in technology and facilities, can pressure margins and require effective cost management to maintain profitability and competitive advantage.
T Rowe Price (TROW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$23.29B
Dividend Yield4.76%
Average Volume (3M)1.41M
Price to Earnings (P/E)11.9
Beta (1Y)1.22
Revenue Growth4.43%
EPS Growth5.55%
CountryUS
Employees8,084
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)2.24
Shares Outstanding219,715,240
10 Day Avg. Volume1,591,881
30 Day Avg. Volume1,413,370
Financial Highlights & Ratios
PEG Ratio0.67
Price to Book (P/B)2.44
Price to Sales (P/S)3.55
P/FCF Ratio19.96
Enterprise Value/Market Cap0.86
Enterprise Value/Revenue2.82
Enterprise Value/Gross Profit5.49
Enterprise Value/Ebitda6.92
Forecast
1Y Price Target
$105.50Price Target Upside-0.46% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering8
T Rowe Price Business Overview & Revenue Model
Company DescriptionT. Rowe Price Group, Inc. is a publicly owned investment manager. The firm provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. It launches and manages equity and fixed income mutual funds. The firm invests in the public equity and fixed income markets across the globe. It employs fundamental and quantitative analysis with a bottom-up approach. The firm utilizes in-house and external research to make its investments. It employs socially responsible investing with a focus on environmental, social, and governance issues. It makes investment in late-stage venture capital transactions and usually invests between $3 million and $5 million. The firm was previously known as T. Rowe Group, Inc. and T. Rowe Price Associates, Inc. T. Rowe Price Group, Inc. was founded in 1937 and is based in Baltimore, Maryland, with additional offices in Colorado Springs, Colorado; Owings Mills, Maryland; San Francisco, California; New York, New York; Philadelphia, Pennsylvania; Tampa, Florida; Toronto, Ontario; Hellerup, Denmark; Amsterdam, The Netherlands; Luxembourg, Grand Duchy of Luxembourg; Zurich, Switzerland; Dubai, United Arab Emirates; London, United Kingdom; Sydney, New South Wales; Hong Kong; Tokyo, Japan; Singapore; Frankfurt, Germany, Madrid, Spain, Milan, Italy, Stockholm, Sweden, Melbourne, Australia, and Amsterdam, Netherlands.
How the Company Makes MoneyT. Rowe Price generates revenue primarily through investment management fees charged to clients based on the assets under management (AUM). The firm earns a percentage of the AUM across its various mutual funds and investment accounts. Additionally, T. Rowe Price may receive performance fees for funds that exceed certain benchmarks. The company also benefits from advisory fees for institutional clients and sub-advisory relationships. Significant partnerships with financial advisors and institutions further enhance its distribution capabilities, contributing to its overall earnings. The firm's strong reputation and investment performance help it attract and retain clients, which is critical for sustaining its revenue streams.
T Rowe Price Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong long-term performance in retirement and fixed income segments, and successful growth in ETFs. However, significant equity outflows, market volatility, and expense growth challenges balanced these positives.Q2-2025 Updates
Positive Updates
Strong Long-Term Investment Performance
Over half of T. Rowe Price's strategies beat their peer groups for 3-, 5-, and 10-year time periods, with 65%, 58%, and 78% of assets respectively outperforming peer group medians.
Retirement and Target Date Fund Success
The Target Date suite surpassed $0.5 trillion in assets, ending the quarter with over $520 billion. The near-dated vintages continue to have top quartile performance versus peers for the 3-, 5-, and 10-year periods.
Growing ETF Business
T. Rowe Price's ETF products saw over $6 billion in inflows in the first half of 2025, bringing AUM in the ETF franchise to $16.2 billion. 11 ETFs have scaled to over $500 million in AUM.
David Giroux's Recognition
David Giroux was named U.S. Morningstar Outstanding Portfolio Manager for the allocation category for the third time in 19 years.
Positive Net Flows in Fixed Income
Fixed income segment is growing with 6 consecutive quarters of positive net flows.
Negative Updates
Equity Outflows and Market Volatility
There were $14.9 billion in net outflows, mainly driven by U.S. equities, affecting the overall average AUM which was down 2% from Q1 2025.
Expense Growth Challenges
Adjusted operating expenses were up 1% from Q1 2025 and up 3.7% from Q2 2024, with technology, occupancy, and facility costs up 7% from Q1 2025.
Weaker Quarter for Emerging Markets and Value Strategies
Emerging markets segment had a weaker quarter versus peers, and a number of value strategies underperformed during the quarter.
Client Outflows and Revenue Impact
Client outflows during the quarter and equity market volatility drove a decrease in the average equity AUM by 5%.
Company Guidance
In the T. Rowe Price Second Quarter 2025 Earnings Conference Call, several key metrics and projections were highlighted. The company reported an adjusted diluted earnings per share of $2.24, consistent with prior quarters, despite $14.9 billion in net outflows largely affecting U.S. equities. The outflows were attributed to client redemptions and rebalancing activities, but inflows were observed in fixed income, multi-asset solutions, and alternatives. Notably, the ETF suite saw $2.5 billion in net inflows, with assets under management (AUM) in ETFs reaching $16.2 billion by June 30, 2025. Additionally, T. Rowe Price's retirement solutions demonstrated strength, with their Target Date suite surpassing $520 billion in AUM. The company aims to manage expenses effectively, targeting a 2-4% increase in operating expenses over the previous year, while implementing strategies to align expense growth with anticipated revenue growth, emphasizing efficiency and strategic investment.T Rowe Price Financial Statement Overview
Summary
T Rowe Price demonstrates strong profitability and a solid balance sheet with low leverage, providing financial stability. However, the decline in revenue growth rate in the TTM is a concern that needs addressing. The company is well-positioned in terms of operational efficiency and equity strength, but should focus on reigniting revenue growth to sustain its financial performance.Income Statement
T Rowe Price's income statement shows a strong profitability profile with a net profit margin of 28.72% for TTM (Trailing-Twelve-Months), indicating efficient cost management. However, the revenue growth rate has declined by 14.1% in the TTM, reflecting potential challenges in revenue generation. The EBIT and EBITDA margins remain robust at 33.62% and 41.58% respectively, showcasing operational efficiency.75
Positive
Balance Sheet
The balance sheet is solid with a low debt-to-equity ratio of 0.045, suggesting conservative leverage. Return on equity is healthy at 19.63%, indicating effective use of equity capital. The equity ratio stands at 73.63%, highlighting a strong equity base relative to total assets, which enhances financial stability.80
Positive
Cash Flow
Cash flow analysis reveals a positive free cash flow growth rate of 2.93% in the TTM, indicating improved cash generation. The operating cash flow to net income ratio is strong at 4.28, reflecting good cash conversion. However, the free cash flow to net income ratio is slightly lower at 0.86, suggesting room for improvement in cash flow efficiency.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.10B | 7.09B | 6.46B | 6.49B | 7.67B | 6.21B |
| Gross Profit | 3.64B | 3.68B | 3.21B | 3.57B | 4.68B | 3.59B |
| EBITDA | 2.89B | 2.98B | 2.52B | 3.14B | 3.91B | 2.94B |
| Net Income | 2.04B | 2.10B | 1.79B | 1.56B | 3.08B | 2.37B |
Balance Sheet | ||||||
| Total Assets | 14.34B | 13.47B | 12.28B | 11.64B | 12.51B | 10.66B |
| Cash, Cash Equivalents and Short-Term Investments | 3.06B | 2.65B | 2.07B | 1.76B | 1.52B | 2.15B |
| Total Debt | 475.20M | 278.70M | 308.50M | 329.60M | 249.20M | 154.10M |
| Total Liabilities | 2.53B | 2.02B | 1.99B | 1.96B | 2.26B | 1.39B |
| Stockholders Equity | 10.56B | 10.35B | 9.51B | 8.84B | 9.02B | 7.71B |
Cash Flow | ||||||
| Free Cash Flow | 1.32B | 1.26B | 911.20M | 2.12B | 3.21B | 1.70B |
| Operating Cash Flow | 1.53B | 1.69B | 1.22B | 2.36B | 3.45B | 1.92B |
| Investing Cash Flow | -140.90M | -177.50M | -527.20M | -41.50M | -1.10B | -36.30M |
| Financing Cash Flow | -1.05B | -936.60M | -1.08B | -2.08B | -2.99B | -1.49B |
T Rowe Price Technical Analysis
Positive
105.99
Price Trends
104.82
Positive
98.86
Positive
100.00
Positive
Market Momentum
0.15
Positive
52.94
Neutral
35.92
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TROW, the sentiment is Positive. The current price of 105.99 is above the 20-day moving average (MA) of 105.93, above the 50-day MA of 104.82, and above the 200-day MA of 100.00, indicating a bullish trend. The MACD of 0.15 indicates Positive momentum. The RSI at 52.94 is Neutral, neither overbought nor oversold. The STOCH value of 35.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 0 New Risks
T Rowe Price Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | 76.67B | 16.60 | 10.96% | 1.78% | 7.41% | 51.70% | |
77 Outperform | $23.29B | 11.85 | 19.39% | 4.76% | 4.43% | 5.55% | |
77 Outperform | 10.72B | 16.28 | 29.48% | 1.13% | 10.55% | 40.74% | |
76 Outperform | 12.68B | 46.83 | 2.53% | 5.20% | 4.72% | -67.85% | |
73 Outperform | 32.20B | 12.72 | 10.44% | 2.68% | 11.66% | 67.88% | |
71 Outperform | 25.15B | 15.46 | 13.47% | 2.32% | 3.44% | 16.76% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
TROW
T Rowe Price
105.99
3.15
3.06%
BK
BNY
108.71
38.22
54.22%
BEN
Franklin Resources
24.42
4.89
25.04%
SEIC
SEI Investments Company
86.72
18.70
27.49%
STT
State Street
113.50
27.19
31.50%
NTRS
Northern
131.50
42.51
47.77%
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.