On Friday, RBC Capital adjusted its outlook on SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) shares, increasing the price target to $75 from the previous $72, while maintaining an Outperform rating on the company's stock.
This decision follows the company's reported acceleration in year-over-year revenue growth, which reached 6.4%, marking the highest rate of organic revenue growth since 2021 for SS&C Technologies.
The company's financial performance this quarter has surpassed both RBC Capital's and Wall Street's expectations, with notable achievements in revenue, adjusted EBITDA, and adjusted EPS. The positive outcome reflects a continued trend of growth for the technology firm, which specializes in providing software and software-enabled services to the financial services industry.
In its financial strategy, SS&C Technologies has demonstrated a strong commitment to returning value to shareholders through significant share repurchase activities. In the second quarter of 2024 alone, the company repurchased $227 million worth of shares. This move underscores management's confidence in the company's financial health and future prospects.
Furthermore, SS&C Technologies' management has expressed an ongoing interest in pursuing mergers and acquisitions, particularly those that complement its existing operations. However, the company emphasizes a disciplined approach to such ventures, with careful consideration of the costs involved.
The updated price target reflects RBC Capital's positive view on SS&C Technologies' current trajectory and potential for continued financial success. The firm's ability to exceed expectations and its proactive measures in share repurchases and strategic growth initiatives contribute to the favorable analyst outlook.
In other recent news, SS&C Technologies Holdings, Inc. reported significant growth in its second-quarter 2024 results, surpassing expectations. The company's adjusted revenue reached a record high of $1,452.4 million, exceeding their forecast by $20 million.
Adjusted diluted earnings per share (EPS) also increased by 17.6% year-over-year to $1.27, reflecting robust organic growth. Notably, SS&C's organic growth reached 6.4%, driven by strong performance in the Alternatives, Blue Prism, and Intralinks divisions.
In response to these promising results, Needham lifted its price target for SS&C from $74.00 to $81.00, maintaining a Buy rating on the stock. The company also reported a significant share repurchase, buying back 3.7 million shares in the second quarter. SS&C's management provided an optimistic outlook for the third quarter and raised the full-year 2024 guidance in all categories.
Additionally, SS&C Technologies is actively pursuing acquisitions that provide attractive returns and expects to close several smaller deals along with a potential substantial acquisition. These recent developments indicate the company's robust approach to growth and client service, with high single-digit organic revenue growth expected in the mid-term.
InvestingPro Insights
Following RBC Capital's updated outlook on SS&C Technologies (NASDAQ:SSNC), real-time metrics from InvestingPro paint a detailed picture of the company's financial landscape. With a market capitalization of $16.82 billion and a P/E ratio standing at 26.46, SS&C showcases a significant presence in the market. The company's revenue for the last twelve months as of Q1 2024 is reported at $5.575 billion, indicating a solid year-over-year growth of 4.19%. Additionally, SS&C's gross profit margin during the same period is an impressive 49.14%, highlighting the company's efficiency in managing its cost of goods sold.
InvestingPro Tips for SS&C Technologies include the fact that the company has successfully raised its dividend for 7 consecutive years, signaling a reliable return to shareholders. Furthermore, analysts expect net income to grow this year, which could contribute to the company's strong financial performance. For investors looking for stability, SS&C is noted for its low price volatility, making it a potentially attractive option for those with a lower risk tolerance.
For readers interested in a deeper analysis, InvestingPro offers additional tips that could provide further insights into SS&C Technologies' financial health and stock performance. Remember to use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and unlock the full spectrum of data and insights available on InvestingPro. There are 9 more InvestingPro Tips available that could help in making a well-informed investment decision.
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