Envestnet had an impressive run over the year-to-date period. The stock has gained 27.6% compared with the 1.9% rally of the industry it belongs to and the 16.1% rise of the Zacks S&P 500 composite.

ENV reported impressive first-quarter 2024 results. Earnings per share (EPS) were 60 cents, surpassing the consensus estimate by 11.1%. The bottom line increased 30.4% from the year-ago quarter. Total revenues of $325 million beat the consensus estimate by a slight margin and improved 8.7% on a year-over-year basis.

How is ENV Doing?

Envestnet has a robust capacity for generating recurring revenues, backed by its asset-based and subscription-based business models. The company serves financial services to its customers through a business-to-business-to-consumer model. It allows these clients to offer Envestnet's platform-based solutions to their end users. On a business-to-business level, the company provides an open platform to customers and third-party developers via an open API framework. In 2023, recurring revenues increased 2.1% on a year-over-year basis.

The company actively focuses on technology development to enhance efficiency, competitiveness, compliance with regulations, and responsiveness to client demands. Continuous technological improvements drive discrete revenue opportunities and build a competitively advantaged leading platform. The current technology infrastructure of Envestnet employs a three-tier architecture, encompassing a web-based user interface, an application tier housing core business logic and an SQL Server database, which it believes offers substantial potential to scale.

Multiple market trends are offering significant opportunities for the technology-driven solutions of ENV. Investment advice is increasingly integral to financial planning, which facilitates clients seeking personalized wealth management services. The adoption of technology is set to increase, driven by the need for cost-effective, guided interactions with customers.

Envestnet's current ratio (a measure of liquidity) at the end of first-quarter 2024 was 1.19, higher than the preceding quarter's 0.9 and 0.75 in the year-ago quarter. A current ratio of more than 1 often indicates that the company will easily pay off its short-term obligations.

Zacks Rank & Other Stocks to Consider

ENV currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Business Services sector are Kyndryl Holdings, Inc. (KD Quick QuoteKD - Free Report) and HNI (HNI Quick QuoteHNI - Free Report) .

Kyndryl presently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KD has a long-term earnings growth expectation of 5%. It delivered a trailing four-quarter earnings surprise of 29.5%, on average.

HNI currently has a Zacks Rank of 2. It has a long-term earnings growth expectation of 12%.

HNI delivered a trailing four-quarter earnings surprise of 67.5%, on average.