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On Wednesday, UBS analyst Kevin McVeigh confirmed a Buy rating on SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) with a steady price target of $105.00. McVeigh highlighted SS&C’s performance, noting the company’s ability to surpass earnings expectations consistently, which contributed to a roughly 30% increase in its stock price over the past year.
McVeigh’s endorsement comes after SS&C’s Analyst Day in September, which projected an acceleration in organic revenue growth to approximately 4-8%, an improvement from the 5% forecasted at the 2021 Analyst Day. This growth is attributed to a combination of factors including solid fundamentals, effective pricing strategies, the acquisition of new clients, enhanced cross-selling opportunities, and the company’s ongoing commitment to returning capital to shareholders.
The analyst also compared SS&C’s valuation to that of peers such as Accenture (NYSE:ACN), Broadridge (BR), and asset managers like Apollo Global Management (NYSE:APO), BlackRock (NYSE:BLK), and The Blackstone Group (NYSE:BX). According to McVeigh, SS&C is trading at a significant discount of around 27% to a blended average of these companies based on a two-year forward price-to-earnings comparison with three-year historical data.
McVeigh believes that the market has yet to fully recognize SS&C’s growing momentum, which is supported by increased operating leverage that facilitates strategic capital allocation. This includes share repurchases, dividend payments, and debt reduction, while mergers and acquisitions are pursued on an opportunistic basis. The company’s financial strategy and market position suggest a potential for valuation expansion as it aligns more closely with its industry counterparts.
In other recent news, SS&C Technologies Holdings, Inc. reported fourth-quarter earnings that surpassed analyst expectations, with total revenue and adjusted EBITDA exceeding DA Davidson’s estimates by 3% and 1%, respectively. Following these results, DA Davidson raised its price target for SS&C to $102 and maintained a Buy rating. Needham also increased its price target for the company to $105, citing a 7% year-over-year increase in organic growth. The company’s intelligent automation and analytics segment led this growth with an 11% increase.
Additionally, Jefferies upgraded SS&C’s stock rating from Hold to Buy, setting a new price target of $94, reflecting optimism about the company’s future performance and strategic investments. In a strategic move, SS&C acquired FPS Trust Company to enhance its benefit payment solutions, further solidifying its position in the industry. UBS reiterated its Buy rating with a price target of $105, highlighting SS&C’s strategic investments and organic revenue growth as key factors in its industry leadership. These recent developments underscore the company’s ongoing efforts to strengthen its market position and expand its service offerings.
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