TROW Intrinsic Value – T. Rowe Price Lacks Revenue Diversity, Stuck In Holding Pattern Despite Fuel Remaining

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Despite a strong track record, the company has recently found itself in a holding pattern, with limited revenue diversity contributing to an inflated valuation. The company has experienced stagnation from a lack of diversification in its investments. This lack of diversity in its revenue stream has left the stock vulnerable to external factors that could reduce investment activities. The stock has also been stuck in a holding pattern despite having fuel to drive its growth. The company’s financial strength and strong track record suggests it should be able to capitalize on opportunities in the market, but it has been unable to do this because of its lack of diversification.

This has led to an inflated valuation and investors have become increasingly wary of the stock. Although T. Rowe Price ($NASDAQ:TROW) is in a state of stagnation, there is still potential for growth. If the company can diversify its revenue streams and capitalize on new opportunities, it could see a rebound in its stock price and break out of the holding pattern it has been in.

Earnings

T. ROWE PRICE recently released its FY2023 Q1 earnings report as of March 31 2021, revealing a 1.9% decrease in total revenue from 1826.8M USD to 1537.6M USD in the last three years, and a 32.0% increase in net income from 749.4M USD. Despite this decrease in total revenue, net income still increased significantly over the past three years, suggesting that the company is managing to maintain relatively strong financial performance. It is clear that T. ROWE PRICE needs to diversify its revenue sources in order to continue to grow and succeed in the future.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for TROW. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for TROW. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for TROW. More…

Key Ratios Snapshot

Some of the financial key ratios for TROW are shown below. More…

Share Price

Monday was not the best day for T. ROWE PRICE stock, as it opened at $110.4 and closed at $110.3, down 0.6% from its previous closing price of $110.9. This is a cause for concern for investors, as the company relies heavily on a single source of income and is unable to diversify its revenue streams. Live Quote…

Analysis – TROW Intrinsic Value

GoodWhale is proud to bring you the financial analysis of T. ROWE PRICE. Using our proprietary Valuation Line, we have calculated the intrinsic value of a share of T. ROWE PRICE to be around $157.5. This means that the current price of $110.3 is undervalued by 30.0%. We believe that this is a great opportunity for investors to get in on the company and benefit from potential upside. We are confident that with careful analysis and research, investors can make sound decisions and capitalize on this market opportunity. More…

Peers

The firm provides its services to individuals, institutions, retirement plans, trusts, and partnerships. It launches and manages equity, fixed income, balanced, and commodity mutual funds. The company was founded in 1937 and is headquartered in Baltimore, Maryland. As of December 31, 2017, T. Rowe Price Group Inc had $934.2 billion in assets under management (AUM). Federated Hermes Inc, Franklin Resources Inc, and ABC arbitrage SA are all competitors of T. Rowe Price Group Inc. Federated Hermes Inc is a global investment manager that offers a range of investment products, including equities, fixed income, and alternatives. As of December 31, 2017, Federated Hermes Inc had $590.6 billion in AUM. Franklin Resources Inc is a global investment management company that provides investment management and related services to institutional and individual investors. As of June 30, 2018, Franklin Resources Inc had $737.2 billion in AUM. ABC arbitrage SA is a French asset management company that specializes in convertible bonds and global equity markets arbitrage. As of December 31, 2017, ABC arbitrage SA had €5.4 billion in assets under management.

– Federated Hermes Inc ($NYSE:FHI)

Federated Hermes Inc. is a publicly traded company with a market capitalization of $2.86 billion as of 2022. The company has a return on equity of 22.41%. Federated Hermes Inc. is a financial services company that provides asset management and related services to individuals, families, institutions, and businesses. The company offers a broad range of investment strategies and products, including equity, fixed income, and alternative investments.

– Franklin Resources Inc ($NYSE:BEN)

Franklin Resources Inc is a publicly owned asset management holding company based in San Mateo, California. The company, through its subsidiaries, manages mutual funds and other investment portfolios. It also provides investment management and advisory services to institutional clients. As of December 31, 2020, Franklin Resources Inc had $744.2 billion in assets under management.

The company’s market cap is 11.69B as of 2022. The company has a return on equity of 12.45%. The company’s primary business is managing mutual funds and other investment portfolios. The company also provides investment management and advisory services to institutional clients.

– ABC arbitrage SA ($LTS:0OPJ)

ABC arbitrage SA is a French holding company that engages in the provision of financial services. The company operates through the following segments: Asset Management, Corporate Finance, and Market Making. The Asset Management segment offers investment products and services to individuals, professionals, and institutional clients. The Corporate Finance segment provides financing and advisory services to companies. The Market Making segment deals with market making activities in listed securities. ABC arbitrage SA was founded in 1991 and is headquartered in Paris, France.

Summary

T. Rowe Price is a respected investment firm, and its stock is currently trading slightly above its fair value.

However, the company does not have the most diversified revenue sources and could benefit from further growth in new areas. Despite this, there is still plenty of potential upside for investors. The company has a strong track record of delivering solid returns and has a long history of success in the market. Investors should consider the potential benefits of investing in T. Rowe Price when considering their options. With careful research and analysis, T. Rowe Price could be a great choice for investors looking for a safe and reliable option.