SEIC

We rate SEI INVESTMENTS CO (SEIC) as Avoid with a composite score of 39.5/100 at a current price of $80.24. The stock falls in the bottom quintile of our universe across key quantitative factors, and the multi-factor weakness suggests a high probability of continued underperformance.

The rating is primarily driven by strength in stability (58th percentile) and value (45th percentile), which together account for the majority of the composite score. Offsetting weakness in quality (30th percentile) and investment (34th percentile) tempers our overall conviction. We assign a Narrow Moat rating (58/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

SEI INVESTMENTS CO holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 39.5/100 places it at rank #3601 in our full 7,333-stock universe. With a $10.5B market capitalization, SEI INVESTMENTS CO operates at meaningful scale within the Finance, Insurance, And Real Estate sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 9%, though momentum at the 36th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 34% (-42.1pp vs sector) narrow to operating margins of 27% (+10.3pp vs sector) and net margins of 31.3%, yielding a gross-to-net conversion rate of 91%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $80.24, SEI INVESTMENTS CO is trading near fair value based on current fundamentals. Our value factor score of 45/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 14.3x (roughly in line with the sector median of 11.9x), EV/EBITDA of 16.3x (at a premium), P/B of 4.1x, P/S of 4.5x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Low uncertainty rating to SEI INVESTMENTS CO. The company exhibits strong financial stability with a beta of 1.01, conservative leverage (19% D/E), and a stability factor in the 58th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: weak quality scores (30th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 58th percentile and quality factor at the 30th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (19% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate SEI INVESTMENTS CO's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 29.1%, disciplined leverage (19% D/E), best-in-class net margins of 31.3%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — SEI INVESTMENTS CO meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 1.15% dividend yield, and the combination of 43.3% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, SEI INVESTMENTS CO receives a Avoid rating with a composite score of 39.5/100 (rank #3601 of 7,333). Our quantitative framework assigns a Narrow Moat (58/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 41/100.

Our analysis does not support a constructive view on SEI INVESTMENTS CO at this time. The combination of the current quantitative profile, low uncertainty, and exemplary capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.