< Return to Bulls page"Good revenue growth across all areas of the company, with potential for margin expansion"
The company has divided its revenues into three primary categories. The Individual Segment encompasses the well known mutual fund service served to consumers through the companies website. This segment received revenues of 23.7m last quarter primarily through premium membership subscriptions and advertisements sold on the site. The second division is the Advisor Segment which provides workstation technology and managed portfolios typically to independent wealth advisers. This segment accounted for 29.3m in revenues last quarter and benefited from strong growth in the number of licenses in use. Finally, the Institutional segment covers investment consulting, retirement advice and more. This is the crown jewel of the company with revenue of $60.8m in the last quarter. With improving margins, the segment saw operating income more than double at $20.7m.
The company also has good potential to increase its profit margins.The company is able to achieve operating leverage through its proprietary databases.These databases have a high fixed cost associated with their development, but have a minimal variable cost. The company uses its databases to leverage across all of its services. Margin expansion may allow the company to beat analyst estimates, as the sell-side does not always factor margin expansion into their models.
