Equitable Holdings Misses EPS Estimate Despite Revenue Growth

Equitable Holdings reported Q4 earnings, missing EPS expectations by 2.5%. However, total revenues increased by 11.3%, indicating growth despite some pressures. Investors should consider these mixed results for potential stock price effects.

Date: 17-02-2025

AI Rating: 6

Equitable Holdings, Inc. has demonstrated mixed performance in its recent quarterly report. Despite a 3.4% rise in shares since the results were shared, the report reveals areas of concern that could affect stock prices.

Earnings Per Share (EPS): The adjusted EPS came in at $1.57, falling short by 2.5% compared to consensus estimates. Even though the EPS improved by 18% year over year, the miss against expectations could spark investor caution and lead to a negative sentiment around the stock. A rating of 5 is given here as the performance is slightly negative in relation to expectations.

Revenue Growth: Despite the EPS miss, total operating revenues surged by 11.3% year over year, reaching $4 billion. However, this figure also missed consensus estimates by 1%. This indicates a neutral stance since the company met its revenue growth targets but did not exceed expectations, rating this aspect a 6.

Net Income: The report shows significant recovery since last year's loss, with pre-tax income totaling $1.2 billion, an improvement compared to a loss of $817 million in the prior year quarter. This improvement is a positive sign, giving it a rating of 7.

Profit Margins: The decrease in total benefits and other deductions overall boosted profitability metrics. The bottom line experienced favorable conditions with costs dropping by 18.9% year over year, allowing an increase in margins, warranting a rating of 7.

Future Outlook: The company has projected a range of cash generation for 2025 at $1.6 to $1.7 billion, along with reaffirmed growth estimates of 12-15% in non-GAAP operating EPS over the coming years. This forward guidance provides a strong outlook, rating it an 8 for its potential to generate investor confidence.

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