Wealthfront (NASDAQ:WLTH) Posts Quarterly Earnings Results, Beats Expectations By $0.01 EPS

Wealthfront (NASDAQ:WLTH) released its quarterly earnings data on Wednesday. The company reported $0.10 EPS for the quarter, topping analysts’ consensus estimates of $0.09 by $0.01, FiscalAI reports. The firm had revenue of $91.87 million during the quarter. The business’s quarterly revenue was up .9% on a year-over-year basis.

Here are the key takeaways from Wealthfront’s conference call:

• Platform assets surpassed $100 billion in August, while quarterly assets reached $99 billion, up 12% year over year. Investment Advisory assets grew 30% year over year to $54.1 billion, supported by $1.1 billion of quarterly net deposits.
• Cash deposit trends improved in July and August as incentives, new products, and stronger cross-product adoption helped address weaker performance from customers who joined during the peak-rate period. Asset-weighted cross-product adoption rose to nearly 64% in August.
• Wealthfront is expanding its product ecosystem, including the October transition of Stock Investing into the Wealthfront Brokerage Account, broader Home Lending availability, Custodial Accounts, and early testing of AI-powered financial guidance.
• Lower interest rates and client incentives pressured cash-management economics. Revenue was up only 1% year over year to $91.9 million, adjusted EBITDA fell 15% to $38.1 million, and the margin declined to 41% as the company continued investing in Home Lending and product development.
• Management expects long-term margins above 40%, but acknowledged near-term pressure from Home Lending investments and noted that housing affordability and higher mortgage rates remain headwinds to loan volume.

Wealthfront Stock Down 1.8%

Shares of WLTH stock opened at $9.46 on Thursday. Wealthfront has a 12 month low of $7.20 and a 12 month high of $14.88. The company has a market cap of $1.41 billion and a PE ratio of -9.18. The business’s 50 day moving average is $9.33 and its two-hundred day moving average is $9.61.

Analyst Ratings Changes

WLTH has been the subject of several recent research reports. JPMorgan Chase & Co. decreased their target price on shares of Wealthfront from $13.00 to $12.00 and set an “overweight” rating for the company in a research report on Friday, June 5th. Wells Fargo & Company cut their price target on shares of Wealthfront from $12.00 to $11.50 and set an “overweight” rating on the stock in a report on Tuesday, August 4th. Weiss Ratings reaffirmed a “sell (d)” rating on shares of Wealthfront in a research note on Monday, July 6th. The Goldman Sachs Group reduced their price objective on shares of Wealthfront from $12.00 to $10.50 and set a “neutral” rating for the company in a research note on Thursday, July 2nd. Finally, Royal Bank Of Canada decreased their price objective on shares of Wealthfront from $14.00 to $13.00 and set an “outperform” rating for the company in a report on Friday, June 5th. Four investment analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the stock currently has a consensus rating of “Hold” and a consensus target price of $12.42.

Insider Activity

In other Wealthfront news, VP Kal Iyer sold 28,498 shares of the business’s stock in a transaction on Wednesday, June 17th. The shares were sold at an average price of $8.46, for a total transaction of $241,093.08. Following the completion of the transaction, the vice president owned 225,771 shares of the company’s stock, valued at $1,910,022.66. The trade was a 11.21% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Lauren Lin sold 4,840 shares of the firm’s stock in a transaction dated Wednesday, June 17th. The shares were sold at an average price of $8.45, for a total value of $40,898.00. Following the completion of the sale, the insider directly owned 158,092 shares in the company, valued at approximately $1,335,877.40. This represents a 2.97% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 136,565 shares of company stock valued at $1,193,520 over the last three months. Corporate insiders own 27.36% of the company’s stock.

Institutional Trading of Wealthfront

Several hedge funds have recently added to or reduced their stakes in the business. Tiger Global Management LLC bought a new stake in shares of Wealthfront in the fourth quarter valued at approximately $205,982,000. Dag Ventures LLC acquired a new position in Wealthfront during the 4th quarter valued at $187,725,000. Index Venture Associates VI Ltd bought a new stake in Wealthfront in the 4th quarter valued at $128,567,000. BlackRock Inc. acquired a new stake in Wealthfront in the 2nd quarter worth $74,766,000. Finally, Wellington Management Group LLP bought a new position in shares of Wealthfront during the 4th quarter worth about $54,182,000.

Wealthfront Company Profile

Wealthfront (NASDAQ:WLTH) is a technology-driven wealth management firm that provides automated investment services to individual investors. Operating as a robo-advisor, the company uses algorithms and software to construct and manage diversified portfolios largely composed of low-cost exchange-traded funds (ETFs). Its platform is geared toward long-term, goal-based investing with an emphasis on passive strategies, automated rebalancing and straightforward user experience delivered through web and mobile applications.

The company’s product suite includes automated portfolio management, tax-loss harvesting and goal-planning tools that help clients set and track financial objectives.