T. Rowe Price Group, Inc. (NASDAQ:TROW) is a prominent asset management firm known for its investment advisory services. The company primarily earns its revenue from fees based on assets under management (AUM), operating in a competitive landscape marked by client outflows and fee pressures. Despite these challenges, TROW's recent financial performance underscores its resilience.
On February 5, 2025, TROW reported an EPS of $2.18, slightly below the estimated $2.20. This minor miss in EPS was accompanied by a revenue of approximately $1.92 billion, which surpassed the estimated $1.8 billion.
The company's net income on a GAAP basis was $439.9 million, showing a slight year-over-year increase. For the entire year of 2024, TROW's adjusted EPS was $9.33, which missed the consensus estimate of $9.42 but still represented a 22.9% increase from the previous year. The net income for the year was $2.1 billion, marking a 17.4% rise.
TROW's stock experienced a 1.8% decline in pre-market trading following the release of its fourth-quarter 2024 results. The company's adjusted EPS for the quarter was $2.12, missing the Zacks Consensus Estimate of $2.23. Despite this, the earnings showed an improvement from the $1.72 per share reported a year ago. This represents an earnings surprise of -4.93%. In the previous quarter, TROW had exceeded expectations with earnings of $2.57 per share against an anticipated $2.36, marking a positive surprise of 8.90%.
The company's net revenues were bolstered by an increase in AUM, which is a positive indicator for future growth. TROW's appreciation in cash and cash equivalents is expected to support continued investment efforts. Despite challenges posed by increased expenses, the rise in AUM and net income suggests a resilient performance by T. Rowe Price. The firm's price-to-earnings (P/E) ratio of approximately 11.49 and earnings yield of 8.71% can be attractive to investors seeking income.
