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Envestnet Drops on Lagging 2021 Outlook

Envestnet reported fourth-quarter results ahead of estimates, but lagging guidance had the stock down on Friday.
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Envestnet  (ENV)  shares dropped on Friday after the digital financial management company issued 2021 earnings guidance that missed analyst expectations. 

The Chicago company expects 2021 adjusted earnings between $1.95 and $2.08 a share on revenue between $1.1 billion and $1.12 billion. 

Analysts are expecting earnings of $2.33 a share on revenue of $1.13 billion. 

Envestnet shares at last check were down 15% to $68. The stock was off 2.8% in 2021 through Thursday's close. It touched a 52-week high $92.51 in early August.

After the closing bell Thursday, Envestnet reported fourth-quarter adjusted earnings of 69 cents a share as revenue rose 10% to $263.8 million. 

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Analysts were expecting earnings of 65 cents per share on revenue of $258.5 million. 

"We enter 2021 with an expanded strategic purpose, and a bold investment plan to capture the sizable opportunity before us, as we work to make financial wellness a reality for everyone," Chief Executive Bill Crager said in a statement. 

Piper Sandler analyst Christopher Donat slashed his price target to $64 a share from $94. He is concerned that the company's plan for $30 million in investments this year won't come to fruition if the share price continues to slide.

Meanwhile, Raymond James analyst Patrick O'Shaughnessy lowered his price target to $91 from $105 while maintaining his strong buy rating.

"This quarter was a reminder of our love-hate relationship with Envestnet: We love its market leadership within a secular growth opportunity, and we love the optionality the Yodlee business provides, but we hate the occasional earnings call curveball that has emerged over the years,” O'Shaughnessy said.