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Victory Capital Holdings (VCTR)
:VCTR
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Victory Capital Holdings
(NASDAQ:VCTR)
78Outperform
Positive Factors
Acquisition and Partnerships
Victory Capital Holdings' acquisition of Amundi US expands its international distribution and bolsters its fixed income capabilities.
Financial Performance
The 1Q25 earnings per share for Victory Capital Holdings increased due to better operating expenses.
Negative Factors
Market Volatility
There is a risk if market volatility persists, which could affect financial estimates.
Victory Capital Holdings (VCTR) vs. S&P 500 (SPY)
Market Cap
$3.60B
Dividend Yield2.99%
Average Volume (3M)309.95K
Price to Earnings (P/E)12.9
Beta (1Y)1.22
Revenue Growth8.48%
EPS Growth38.77%
CountryUS
Employees481
SectorFinancial
Sector Strength77
IndustryAsset Management Services
Share Statistics
EPS (TTM)4.38
Shares Outstanding63,661,987
10 Day Avg. Volume380,418
30 Day Avg. Volume309,946
Financial Highlights & Ratios
PEG Ratio0.33
Price to Book (P/B)N/A
Price to Sales (P/S)4.03
Price to Cash Flow (P/CF)9.80
P/FCF Ratio8.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$74.13Price Target Upside29.53% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Victory Capital Holdings Business Overview & Revenue Model
Company DescriptionVictory Capital Holdings, Inc. engages in the provision of investment management products and services to institutional and intermediary clients. The company sells and distributes its products through centralized distribution model, broker-dealers, retirement platforms, and registered investment advisor networks. Its model features an operating platform that provides centralized distribution, marketing, and operations infrastructure to its franchises and solutions platform. The company was founded on February 13, 2013 and is headquartered in Brooklyn, OH.
How the Company Makes MoneyVictory Capital Holdings generates revenue primarily through management fees charged on the assets under management (AUM) across its diverse range of investment products and services. These fees are typically calculated as a percentage of the AUM, providing a stable and scalable revenue stream that grows with the firm's asset base. Additionally, the company may earn performance-based fees on certain investment products, rewarding the firm for exceeding predefined performance benchmarks. Victory Capital's multi-boutique model allows it to leverage the unique expertise of its different franchises, attracting a broad client base and enabling cross-selling opportunities. Strategic acquisitions and partnerships further bolster the firm's growth, allowing expansion into new markets or investment capabilities, thereby enhancing its earnings potential.
Victory Capital Holdings Financial Statement Overview
Summary
Victory Capital Holdings demonstrates financial robustness with strong revenue growth, high profitability margins, and a solid cash flow position. The balance sheet transformation to a debt-free status in 2024 enhances financial stability. While historical leverage poses a potential risk, the company's current financial performance is commendable, reflecting effective management and strategic growth initiatives.Income Statement
Victory Capital Holdings has demonstrated strong revenue growth with a revenue growth rate of 8.8% from 2023 to 2024 and a consistent upward trend over the past years. The company maintains a robust gross profit margin of 100%, indicating efficient cost management. Net profit margin improved from 25.9% in 2023 to 32.3% in 2024, showcasing enhanced profitability. The EBIT margin of 47.9% and EBITDA margin of 27.4% in 2024 reflect solid operating performance. These metrics suggest a well-managed company with strong revenue and profit growth.85
Very Positive
Balance Sheet
The company's balance sheet is strong with a debt-free status in 2024, improving from previous years where debt was present. The equity ratio increased to 44.0% in 2024 from 41.4% in 2023, indicating a stable financial structure. Return on Equity (ROE) rose to 25.7% in 2024, highlighting efficient use of equity to generate profits. However, the relatively high leverage in prior years may pose potential risks if not managed carefully.78
Positive
Cash Flow
Victory Capital Holdings exhibits a healthy cash flow position with a free cash flow growth of 4.2% from 2023 to 2024. The operating cash flow to net income ratio of 1.18 in 2024 suggests strong cash generation relative to net income. The free cash flow to net income ratio is 1.17, indicating effective conversion of income into cash flow. Overall, the company shows positive cash flow trends, though careful monitoring is required to sustain this trajectory.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 893.48M | 821.03M | 854.80M | 890.26M | 775.35M | Gross Profit |
| 893.48M | 455.97M | 455.50M | 479.05M | 402.51M | EBIT |
| 427.51M | 328.46M | 399.11M | 373.85M | 314.71M | EBITDA |
| 481.37M | 394.32M | 413.59M | 427.23M | 360.56M | Net Income Common Stockholders |
| 288.86M | 213.16M | 275.51M | 278.39M | 212.52M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 126.73M | 123.55M | 64.97M | 69.53M | 22.74M | Total Assets |
| 2.55B | 2.54B | 2.54B | 2.58B | 1.73B | Total Debt |
| 963.86M | 1.00B | 985.51M | 1.13B | 769.01M | Net Debt |
| 837.13M | 876.88M | 947.34M | 1.06B | 746.26M | Total Liabilities |
| 1.43B | 1.49B | 1.48B | 1.65B | 1.02B | Stockholders Equity |
| 1.12B | 1.05B | 1.07B | 929.93M | 707.54M |
| Cash Flow | Free Cash Flow | |||
| 338.70M | 325.12M | 329.97M | 363.52M | 242.56M | Operating Cash Flow |
| 339.98M | 330.29M | 335.21M | 376.20M | 250.62M | Investing Cash Flow |
| -3.98M | -7.84M | -6.32M | -556.59M | -12.34M | Financing Cash Flow |
| -332.76M | -237.13M | -360.19M | 227.22M | -252.70M |
Victory Capital Holdings Technical Analysis
Negative
57.23
Price Trends
64.18
Negative
63.97
Negative
57.38
Negative
Market Momentum
-2.38
Positive
33.90
Neutral
17.50
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VCTR, the sentiment is Negative. The current price of 57.23 is below the 20-day moving average (MA) of 62.85, below the 50-day MA of 64.18, and below the 200-day MA of 57.38, indicating a bearish trend. The MACD of -2.38 indicates Positive momentum. The RSI at 33.90 is Neutral, neither overbought nor oversold. The STOCH value of 17.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VCTR.
Victory Capital Holdings Risk Analysis
Victory Capital Holdings disclosed 54 risk factors in its most recent earnings report. Victory Capital Holdings 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
Victory Capital Holdings 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 | $3.60B | 12.90 | 26.57% | 2.99% | 8.48% | 38.77% | |
74 Outperform | $141.34B | 21.67 | 14.67% | 2.24% | 12.15% | 15.17% | |
73 Outperform | $74.40B | 18.20 | 28.29% | 1.42% | -20.40% | -13.30% | |
71 Outperform | $6.82B | 12.59 | 5.31% | 5.38% | 3.97% | ― | |
70 Outperform | $21.44B | 10.79 | 20.60% | 5.15% | 9.80% | 17.87% | |
66 Neutral | $10.31B | 30.09 | 2.76% | 6.37% | 9.48% | -65.57% | |
64 Neutral | $13.79B | 10.52 | 9.20% | 4.24% | 17.25% | -7.60% |
* Financial Sector Average
Performance Comparison
VCTR
Victory Capital Holdings
57.23
18.27
46.89%
APO
Apollo Global Management
134.92
26.46
24.40%
BLK
BlackRock
910.06
102.74
12.73%
BEN
Franklin Resources
19.21
-7.09
-26.96%
IVZ
Invesco
15.25
0.25
1.67%
TROW
T Rowe Price
93.28
-19.31
-17.15%
Victory Capital Holdings Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -12.21% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements, with record-breaking revenue, strong growth in the ETF platform, and progress in the Amundi acquisition. Despite these successes, there were some challenges, including a decline in total client assets and outflows in the Sycamore franchise. Overall, the positive highlights significantly outweigh the lowlights, indicating strong performance and growth potential.Highlights
Record Revenue and Earnings
Victory Capital reported record revenue of $232.4 million for the fourth quarter and $893 million for the full year 2024, a 9% increase from 2023. Adjusted earnings per diluted share reached a record high of $1.45 in the quarter, up 26% year-over-year.
Strong Growth in ETF Platform
Victory Shares ETF platform achieved strong sales throughout the year, increasing AUM to close to $12 billion. It experienced accelerated growth, largely due to innovative product launches and expanded distribution reach.
Amundi Acquisition Progress
The acquisition of Amundi U.S. is on track to close by the end of the quarter, with anticipated $100 million in cost synergies. Amundi U.S. mutual funds posted net long-term flows of $2.6 billion in 2024.
Shareholder Returns
Victory Capital returned $132.4 million to shareholders in Q4 through share repurchases and dividends, and announced a 7% increase in its quarterly cash dividend.
Record Adjusted EBITDA and Margin
Adjusted EBITDA reached a record $125.5 million in Q4 with a margin of 54%. For the full year, adjusted EBITDA grew by 14% to $476 million, with a margin expansion of 230 basis points to 53.2%.
Lowlights
Decline in Total Client Assets
Total client assets declined by just under 3% during the fourth quarter, primarily driven by market actions, ending at $176.1 billion.
Sycamore Franchise Outflows
The Sycamore franchise experienced some outflows despite long-term positive cycles, contributing to challenges in maintaining net inflows.
Company Guidance
In the Victory Capital fourth quarter 2024 earnings call, several key financial metrics and business updates were discussed. The company reported a record high adjusted earnings per diluted share with tax benefit of $1.45 for the quarter, marking a 7% increase from the previous quarter and a 26% rise from the fourth quarter of 2023. Year-over-year, the adjusted earnings per diluted share increased by 19%, from $4.51 in 2023 to $5.36 in 2024. Victory Capital also achieved record adjusted EBITDA of $126 million and a margin of 54%. Total client assets grew to $176.1 billion, up $9.5 billion or 6% from the previous year. The company reaffirmed its guidance of $100 million in cost synergies from the Amundi acquisition by the end of the second year of ownership, with the majority of savings expected in the first year post-closing. Additionally, Victory Capital's ETF platform, Victory Shares, saw significant growth, with assets under management nearing $12 billion, fueled by strong sales of both rules-based and active ETFs. The company also highlighted its capital return to shareholders, with $132.4 million returned in the fourth quarter and the authorization of a new $200 million share repurchase program.Victory Capital Holdings Corporate Events
Stock BuybackDividendsBusiness Operations and Strategy
Victory Capital Launches Largest Stock Buyback Program
Positive
Dec 19, 2024
Victory Capital Holdings announced the approval of a new $200 million stock repurchase program, marking its largest ever, to be completed by the end of 2026. This initiative aligns with the company’s strategy to enhance earnings and cash flow while rewarding shareholders through repurchases and dividends, continuing from the completion of a previous $100 million buyback plan.
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.