Is SS&C Technologies Holdings Inc. (SSNC) positioned for future growth?

SS&C Technologies Holdings Inc. (NASDAQ: SSNC) stock fell -1.45% on Friday to $51.06 against a previous-day closing price of $51.81. With 1.29 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.44 million shares. During the session, the Software – Application company that operates in wider Technology sector, reached to the highest price of $51.89 whereas the lowest price it dropped to was $50.93. The 52-week range on SSNC shows that it touched its highest point at $84.85 and its lowest point at $51.77 during that stretch. It currently has a 1-year price target of $76.40. With its current market cap of 13.15 billion, SSNC has annualized dividend of $0.80 while the current yield stands at 1.57%. Beta for the stock currently stands at 1.46.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SSNC was down-trending over the past week, with a drop of -4.69%, but this was down by -13.09% over a month. Three-month performance dropped to -11.71% while six-month performance fell -33.41%. The stock lost -26.45% in the past year, while it has lost -37.72% so far this year. A look at the trailing 12-month EPS for SSNC yields 2.69 with Next year EPS estimates of 5.35. For the next quarter, that number is 1.19. This implies an EPS growth rate of 27.60% for this year and 10.70% for next year. EPS is expected to grow by 7.87% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 36.30%.

Float and Shares Shorts:

At present, 254.90 million SSNC shares are outstanding with a float of 222.88 million shares on hand for trading. On Jul 14, 2022, short shares totaled 2.95 million, which was 1.16% higher than short shares on Jun 14, 2022. In addition to Mr. William C. Stone as the firm’s Founder, Chairman & CEO, Mr. Rahul Kanwar serves as its Pres & COO.

Institutional Ownership:

Through their ownership of 86.61% of SSNC’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 45.12% of SSNC, in contrast to 40.63% held by mutual funds. Shares owned by individuals account for 24.48%. As the largest shareholder in SSNC with 7.89% of the stake, The Vanguard Group, Inc. holds 20,128,740 shares worth 20,128,740. A second-largest stockholder of SSNC, Janus Henderson Investors US LLC, holds 14,859,932 shares, controlling over 5.83% of the firm’s shares. Select Equity Group LP is the third largest shareholder in SSNC, holding 10,444,122 shares or 4.10% stake. With a 3.40% stake in SSNC, the Janus Henderson Enterprise Fund is the largest stakeholder. A total of 8,676,112 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.51% of SSNC stock, is the second-largest Mutual Fund holder. It holds 6,404,636 shares valued at 357.12 million. BlackRock Equity Dividend Fund holds 2.26% of the stake in SSNC, owning 5,765,716 shares worth 321.5 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SSNC since 12 analysts follow the stock currently. There are 8 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 3 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SSNC analysts setting a high price target of $83.58 and a low target of $65.00, the average target price over the next 12 months is $76.46. Based on these targets, SSNC could surge 63.69% to reach the target high and rise by 27.3% to reach the target low. Reaching the average price target will result in a growth of 49.75% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SSNC will report FY 2022 earnings on 02/09/2023. Analysts have provided yearly estimates in a range of $5.35 being high and $4.77 being low. For SSNC, this leads to a yearly average estimate of $4.87. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. SS&C Technologies Holdings Inc. surprised analysts by -$0.07 when it reported $1.10 EPS against a consensus estimate of $1.17. The surprise factor in the prior quarter was -$0.00. Based on analyst estimates, the high estimate for the next quarter is $1.37 and the low estimate is $1.16. The average estimate for the next quarter is thus $1.20.

Dividends & Yield:

In terms of dividends, SSNC has a current ratio of $0.8, which is $0.8 over the trailing 12-months, while a dividend of $0.46 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and SSNC currently yields $1.57. In the past year, SSNC’s dividend yield has been $1.57, but when looking at the stock over the past five years, its yield has been $0.76. Accordingly, SSNC has a current buyback yield of $2.56. This was $2.56 for the TTM.

Summary of Insider Activity:

Insiders traded SSNC stock several times over the past three months with 4 Buys and 4 Sells. In these transactions, 200,000 shares were bought while 200,000 shares were sold. The number of buy transactions has increased to 5 while that of sell transactions has risen to 5 over the past year. The total number of shares bought during that period was 200,031 while 310,000 shares were sold.

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