On Friday, SS&C Technologies Holdings, Inc. (NASDAQ: SSNC) saw its price target increased to $81.00 from $74.00 by Needham, while the firm sustained a Buy rating on the stock.
The company's second-quarter 2024 results exceeded expectations, with organic growth reaching 6.4%, an increase from the previous quarter's 4.7%. This growth was driven by robust performance in the Alternatives, Blue Prism, and Intralinks divisions.
The positive trend and effective execution led the management to provide an optimistic outlook for the third quarter and to raise the full-year 2024 guidance in all categories.
Additionally, SS&C has been actively engaging in share repurchases, having bought back 3.7 million shares in the second quarter. Alongside the earnings report, the company also declared an authorization to repurchase up to $1 billion in stock.
The strong financial performance and strategic share buybacks come at a time when SS&C's shares are trading at a price-to-earnings (P/E) ratio of approximately 12 times Needham's fiscal year 2025 earnings estimate.
This valuation, coupled with the encouraging growth prospects and double-digit EPS growth potential, supports the firm's decision to reiterate the Buy rating and elevate the stock's price target.
SS&C's commitment to shareholder returns through stock repurchases, as well as its solid financial outlook, are key factors that contributed to the revised price target and the maintained positive stance on the stock's future performance.
In other recent news, SS&C Technologies Holdings, Inc. reported a record adjusted revenue of $1,452.4 million for the second quarter of 2024, surpassing their forecast by $20 million. The company's adjusted diluted earnings per share (EPS) also increased by 17.6% year-over-year to $1.27, marking strong organic growth.
SS&C Technologies also saw a 6.4% organic revenue growth, primarily driven by its alternatives, GIDS, wealth and investment technology, and Intralinks businesses. The firm repurchased 3.7 million shares for $227 million, the largest buyback in its history, and renewed a $1 billion common stock repurchase program.
Debt was reduced by $25.2 million in Q2 2024, and the net leverage ratio stood at 2.84 times consolidated EBITDA. The CEO, William Stone, discussed growth opportunities, including outsourcing, lift-out services, and new product rollouts. The company is focusing on acquisitions that provide attractive returns and expects to close several smaller deals along with a potential substantial acquisition.
These are recent developments that indicate a robust approach to growth and client service. SS&C Technologies anticipates a lower Q4 organic growth due to tough year-over-year comparisons but is confident in achieving high single-digit organic revenue growth in the mid-term.
InvestingPro Insights
Recent analysis from InvestingPro underscores SS&C Technologies Holdings, Inc.'s (NASDAQ: SSNC) strong market position and potential for continued growth. With a market capitalization of $16.82 billion and a P/E ratio of 25.76, SS&C stands out in the market. The company's gross profit margins are particularly impressive, reported at 49.14% for the last twelve months as of Q1 2024, highlighting its efficiency and ability to manage costs effectively.
InvestingPro Tips further reveal that SS&C has not only consistently raised its dividend for 7 consecutive years but has also maintained dividend payments for 11 consecutive years, showcasing its commitment to shareholder returns. Additionally, the firm is trading near its 52-week high, with the price at 97.88% of this peak, which may interest investors looking for stable investments with growth potential. For more detailed analysis and additional tips on SS&C Technologies, visit InvestingPro. There are 9 more InvestingPro Tips available that could provide deeper insights into the company's financial health and investment potential.
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