SSNC Stock: Leading in the Financial Services Software Space

ssnc stock analysis
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SSNC Stock to Grow Further in a High Potential Industry

Investors stand to make above-average returns by investing in companies that help others win through digital transformation. One of the most impacted industries in these changing times is the financial services sector. There are many players helping financial services companies achieve a competitive edge, but only a few stocks will be winners.

One such example is SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), which is a leading provider of advanced software products and services to financial service providers. The company’s solutions help players in the financial industry to automate complex business processes and manage their information processing requirements effectively.

The company has a broad portfolio of software products that enable its clients to automate and integrate diverse functions such as trading, modeling, portfolio management, reporting, accounting, and reconciliation. Hence, the clients can focus better on their core operations. As a result, SSNC stock has been posting impressive gains.

SS&C Technologies provides its products and services to about 11,000 clients around the world. The company serves a number of vertical markets within the financial services industry, which is expected to continue growing in the coming years.

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SS&C believes that financial service providers will increasingly turn to IT solutions from independent vendors, as a result of heightened regulatory requirements and economic challenges.

The worldwide banking and financial services applications market is expected to reach $26.4 billion by 2021. Financial service firms are looking at more risk-averse business strategies and simplified regulatory compliance, which signals to more investments in IT and outsourcing in the future. (Source: “Top 10 Banking and Financial Services Software Vendors and Market Forecast 2016-2021,” Apps Run The World, January 15, 2018.)

The company is well positioned to take advantage of the changing landscape, so this bodes well for SSNC stock.

This month, SS&C entered into an agreement to acquire CACEIS North America, the fund administration business of CACEIS, based in New York and Toronto.

The acquisition is expected to close within the first quarter of 2018. The deal is expected to enhance the depth of the company’s teams and its servicing capability in the New York and Toronto markets.

SS&C has been performing well on the financial front. It announced its fourth-quarter and full-year 2017 results last month. The quarterly generally accepted accounting principles (GAAP) revenue came in at $438.4 million, representing a growth of 9.3%. Adjusted diluted earnings per share grew by 17.4% year-over-year.

“Our growth came on the back of robust sales, completed implementations, and large new clients moving to full run-rate revenue.  We also continued delivering acquisition synergies,” said CEO Bill Stone. (Source: “SS&C Technologies Reports Record Fourth Quarter and Full Year 2017 Earnings,” SS&C Technologies Holdings Inc, February 15, 2018.)

The strong business performance has been a big boost to the company’s stock value, which has gained more than 45% in the last year and more than 270% over the last five years. The following chart shows this splendid rise.

ssnc stock

Chart courtesy of StockCharts.com

Given the current momentum and the company’s ability to deliver, more gains are likely ahead for SSNC stock.

Analyst Take

SS&C Technologies is a leading player in the financial services software space and has been posting strong revenue performance.

Given the number of changes going on in the financial services industry, SSNC stock has more upside potential in the coming years.