Is SEI (SEIC) a Solid Growth Stock? Heres Why You Should Consider It

AnonymousBusiness2025-06-269020

Growth stocks are highly sought after by investors due to their potential for exceptional returns. However, finding the right growth stock can be a challenging task. In addition to volatility, these stocks carry above-average risk by their nature, and one could end up losing if the growth story is over or nearing its end. Fortunately, the Zacks Growth Style Score, which looks beyond traditional growth attributes to analyze a company's real growth prospects, can make it easier to identify cutting-edge growth stocks. One such stock currently recommended by our proprietary system is SEI Investments (SEIC).

Earnings growth is arguably the most important factor for growth investors. Double-digit earnings growth is highly preferable as it often indicates strong prospects and potential stock price gains for the company. While the historical EPS growth rate for SEI is 5.7%, the company's EPS is expected to grow 6.3% this year, crushing the industry average of 2%.

Impressive Asset Utilization Ratio

The asset utilization ratio, also known as the sales-to-total-assets (S/TA) ratio, is an important indicator in growth investing. This metric shows how efficiently a firm is utilizing its assets to generate sales. SEI has an S/TA ratio of 0.83, which means that the company generates $0.83 in sales for each dollar in assets. This is significantly higher than the industry average of 0.23, indicating that the company is more efficient in generating sales.

Promising Earnings Estimate Revisions

In addition to the metrics outlined above, investors should consider the trend in earnings estimate revisions. A positive trend in earnings estimate revisions is a plus and has a strong correlation with near-term stock price movements. The current-year earnings estimates for SEI have been revising upward, with the Zacks Consensus Estimate for the current year surging 0.6% over the past month.

Conclusion

SEI Investments (SEIC) has not only earned a Growth Score of A based on a number of factors, including earnings growth, impressive asset utilization ratio, and promising earnings estimate revisions, but it also carries a Zacks Rank #2. This combination positions SEI well for outperformance, so growth investors may want to consider betting on it.

If you're interested in more recommendations from Zacks Investment Research, you can download their list of 7 Best Stocks for the Next 30 Days for free by clicking the link below.