Looking back on custody bank stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including SEI Investments (NASDAQ: SEIC) and its peers.

Custody banks safeguard financial assets and provide services like settlement, accounting, and regulatory compliance for institutional investors. Growth opportunities stem from increasing global assets under custody, demand for data analytics, and blockchain technology adoption for settlement efficiency. Challenges include fee pressure from large clients, substantial technology investment requirements, and competition from both traditional players and fintech firms entering the space.

The 16 custody bank stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 5%.

In light of this news, share prices of the companies have held steady as they are up 4.8% on average since the latest earnings results.

SEI Investments (NASDAQ: SEIC)

Founded in 1968 as Simulated Environments Inc. to train bank loan officers using computer simulations, SEI Investments (NASDAQ: SEIC) provides technology platforms, investment management, and operational solutions for financial institutions, wealth managers, and investors.

SEI Investments reported revenues of $578.5 million, up 7.7% year on year. This print fell short of analysts’ expectations by 0.5%. Overall, it was a mixed quarter for the company with a beat of analysts’ EPS estimates but a significant miss of analysts’ AUM estimates.

"SEI delivered another strong quarter, surpassing $100 million in net sales events year to date—a record for our company through the third quarter. Excluding one-time items, third-quarter earnings per share also hit a record high. Our growth is underscored by the disciplined execution of our clear enterprise strategy, and we have confidence in our healthy sales pipelines," said CEO Ryan Hicke.

Interestingly, the stock is up 2% since reporting and currently trades at $83.05.

Is now the time to buy SEI Investments? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Hamilton Lane (NASDAQ: HLNE)

With over $100 billion in assets under management and supervision, Hamilton Lane (NASDAQ: HLNE) is an investment management firm that specializes in private markets, offering advisory services and fund solutions to institutional and private wealth investors.

Hamilton Lane reported revenues of $190.9 million, up 27.3% year on year, outperforming analysts’ expectations by 12.8%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

The market seems happy with the results as the stock is up 14.6% since reporting. It currently trades at $131.75.

Is now the time to buy Hamilton Lane? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: P10 (NYSE: PX)

Operating as a bridge between institutional investors and hard-to-access private market opportunities, P10 (NYSE: PX) is an alternative asset management firm that provides access to private equity, venture capital, impact investing, and private credit opportunities in the middle and lower middle markets.

P10 reported revenues of $75.93 million, up 2.3% year on year, falling short of analysts’ expectations by 4.5%. It was a slower quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ management fees estimates.

P10 delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 7.1% since the results and currently trades at $9.83.

Read our full analysis of P10’s results here.

Northern Trust (NASDAQ: NTRS)

Founded in 1889 during Chicago's post-Great Fire rebuilding boom, Northern Trust (NASDAQ: NTRS) provides wealth management, asset servicing, and banking solutions to corporations, institutions, families, and high-net-worth individuals globally.

Northern Trust reported revenues of $2.03 billion, up 5.8% year on year. This print met analysts’ expectations. Aside from that, it was a mixed quarter as it also recorded a solid beat of analysts’ AUM estimates but a slight miss of analysts’ advisory and servicing fees estimates.

The stock is up 7.2% since reporting and currently trades at $137.76.

Read our full, actionable report on Northern Trust here, it’s free for active Edge members.

Federated Hermes (NYSE: FHI)

With roots dating back to 1955 and a pioneering role in money market funds, Federated Hermes (NYSE: FHI) is an investment management firm that offers a wide range of funds and strategies for institutional and individual investors.

Federated Hermes reported revenues of $469.4 million, up 14.9% year on year. This result topped analysts’ expectations by 5.5%. Overall, it was a stunning quarter as it also put up a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

The stock is up 11.6% since reporting and currently trades at $52.77.

Read our full, actionable report on Federated Hermes here, it’s free for active Edge members.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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