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Investing.com - DA Davidson raised its price target on SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) to $98.00 from $94.00 while maintaining a Buy rating ahead of the company’s second-quarter earnings report.
The financial technology firm is scheduled to report its Q2 results after market close on Wednesday, July 23, with a conference call planned for 5:00 PM ET. DA Davidson expects SS&C to meet or modestly exceed forecasts for the quarter and anticipates management will maintain or slightly adjust annual guidance.
For Q2 2025, the research firm forecasts 4.5% year-over-year growth in adjusted revenue to $1.52 billion, slightly above the consensus estimate of $1.51 billion. This growth is expected to include organic constant currency growth of 2.6%, plus approximately $20 million in acquired revenue from Battea-Class Action (WA:ACT), with strength continuing in Alternative Fund Administration operations.
DA Davidson projects Q2 adjusted EBITDA grew 4.6% year-over-year to $586 million, with margins flat compared to the prior year at 38.6%. The firm expects non-GAAP earnings per share increased 9% year-over-year to $1.38, with the company ending the quarter with $0.46 billion in unrestricted cash and $6.72 billion in debt.
In late May, SS&C announced its Board of Directors authorized a renewal and expansion of the company’s share repurchase program, allowing for up to $1.5 billion in share repurchases, representing approximately 7% of total shares at current price levels. DA Davidson’s updated forecasts assume the company will direct approximately $650 million to share repurchases annually from 2025 to 2027.
In other recent news, SS&C Technologies Holdings, Inc. announced an expansion of its stock repurchase program, now authorizing buybacks of up to $1.5 billion. This initiative, approved by the Board of Directors, reflects the company’s confidence in its financial stability and aims to enhance shareholder value. Additionally, SS&C declared a quarterly dividend of $0.25 per share. Analyst firm DA Davidson maintained a Buy rating for SS&C, though it adjusted the price target from $100 to $94 after the company’s first-quarter earnings slightly exceeded expectations. Similarly, Needham analysts lowered their price target from $105 to $90 while retaining a Buy rating, noting the company’s year-over-year organic growth of 5.1% and a standout 10.3% increase in its GlobeOp segment.
Despite these adjustments, analysts remain optimistic about SS&C’s potential for growth, especially in the latter half of the year. Raymond (NSE:RYMD) James analysts maintained a Market Perform rating post-third quarter results, expressing concerns over SS&C’s shift in capital allocation strategy towards mergers and acquisitions for fiscal year 2026. This strategy shift comes amid a backdrop of reduced guidance for fiscal year 2025, following two quarters of lackluster performance. The company’s management has revised its 2025 adjusted net income and EPS guidance upwards, signaling confidence despite near-term economic uncertainties.
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