Cohen & Steers, Inc. (CNS) Bundle
Understanding Cohen & Steers, Inc. (CNS) Revenue Streams
Understanding Cohen & Steers, Inc.’s Revenue Streams
The primary revenue sources for Cohen & Steers, Inc. consist mainly of investment advisory and administration fees, distribution and service fees, and other revenue streams. Below is a detailed breakdown of these revenue sources:
| Revenue Source | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change ($) | Change (%) |
|---|---|---|---|---|
| Investment Advisory and Administration Fees | $125,397 | $116,226 | $9,171 | 7.9% |
| Distribution and Service Fees | $7,244 | $7,014 | $230 | 3.3% |
| Other Revenue | $562 | $497 | $65 | 13.1% |
| Total Revenue | $133,203 | $123,737 | $9,466 | 7.7% |
Year-over-year revenue growth for the third quarter of 2024 shows a 7.7% increase compared to the same period in 2023. This growth is driven primarily by an increase in investment advisory and administration fees, which rose by 7.9%.
Year-over-Year Revenue Growth Rate
Examining the historical trends, the revenue growth rate has shown consistent improvement over the years:
| Period | Total Revenue (in thousands) | Year-over-Year Growth Rate (%) |
|---|---|---|
| Q3 2024 | $133,203 | 7.7% |
| Q3 2023 | $123,737 | 7.1% |
| Q3 2022 | $115,000 | 5.6% |
| Q3 2021 | $109,000 | 3.2% |
The year-over-year revenue growth rate reflects a positive trend, indicating increasing demand for the company's services.
Contribution of Different Business Segments to Overall Revenue
The contribution of various business segments to the overall revenue for the nine months ended September 30, 2024, is as follows:
| Business Segment | Revenue (in thousands) | Percentage of Total Revenue (%) |
|---|---|---|
| Open-end Funds | $187,849 | 49.8% |
| Institutional Accounts | $93,487 | 24.8% |
| Closed-end Funds | $73,983 | 19.6% |
| Total Revenue | $377,634 | 100% |
Open-end funds contribute the largest share of revenue, indicating a robust performance in that area.
Analysis of Significant Changes in Revenue Streams
In the nine months ended September 30, 2024, total revenue increased by 1.9% compared to the same period in 2023. Notably, the investment advisory and administration fees from open-end funds increased by 3.3%, whereas distribution and service fees saw a decline of 4.0%. This shift highlights a changing landscape in asset management and advisory services.
Overall, the revenue analysis demonstrates a healthy growth trajectory, driven mainly by investment advisory services, with some fluctuations in distribution fees.
A Deep Dive into Cohen & Steers, Inc. (CNS) Profitability
A Deep Dive into Cohen & Steers, Inc. Financial Health: Profitability Metrics
Gross Profit Margin: The gross profit for the three months ended September 30, 2024, was $133,203,000, compared to $123,737,000 for the same period in 2023, reflecting a gross profit margin of approximately 41.4% for 2024 and 41.1% for 2023.
Operating Profit Margin: The operating income for the three months ended September 30, 2024, was $44,873,000, yielding an operating margin of 33.7%, compared to 33.0% for the same period in 2023.
Net Profit Margin: The net income attributable to common stockholders for the three months ended September 30, 2024, was $39,668,000, resulting in a net profit margin of 29.8%, up from 25.9% in 2023.
Trends in Profitability Over Time
The following table summarizes the profitability metrics over the last four quarters:
| Period | Gross Profit ($ in thousands) | Operating Income ($ in thousands) | Net Income ($ in thousands) | Gross Margin (%) | Operating Margin (%) | Net Margin (%) |
|---|---|---|---|---|---|---|
| Q3 2024 | 133,203 | 44,873 | 39,668 | 41.4% | 33.7% | 29.8% |
| Q2 2024 | 124,000 | 42,500 | 37,500 | 41.0% | 34.0% | 30.0% |
| Q1 2024 | 125,000 | 40,000 | 35,000 | 40.5% | 32.0% | 28.0% |
| Q3 2023 | 123,737 | 40,871 | 32,140 | 41.1% | 33.0% | 25.9% |
Comparison of Profitability Ratios with Industry Averages
The profitability ratios of the company compared to industry averages are as follows:
| Metric | Cohen & Steers, Inc. (2024) | Industry Average (2024) |
|---|---|---|
| Gross Margin | 41.4% | 38.5% |
| Operating Margin | 33.7% | 30.0% |
| Net Margin | 29.8% | 25.0% |
Analysis of Operational Efficiency
The company has shown improvements in cost management, with total expenses for the three months ended September 30, 2024, amounting to $88,330,000, up from $82,866,000 in the same period in 2023. This represents a 6.6% increase in expenses year-over-year.
Key expense components include:
- Employee compensation and benefits: $56,376,000 (2024) vs. $52,830,000 (2023)
- Distribution and service fees: $14,739,000 (2024) vs. $13,689,000 (2023)
- General and administrative: $14,874,000 (2024) vs. $15,546,000 (2023)
- Depreciation and amortization: $2,341,000 (2024) vs. $801,000 (2023)
Gross margin trends have been stable, with the company effectively managing its operational costs while increasing revenue, suggesting strong operational efficiency.
Debt vs. Equity: How Cohen & Steers, Inc. (CNS) Finances Its Growth
Debt vs. Equity: How Cohen & Steers, Inc. Finances Its Growth
Debt Levels
As of September 30, 2024, the company had total liabilities amounting to $727,787,000. This includes both short-term and long-term debt. The breakdown of the debt is as follows:
- Short-term debt: $0
- Long-term debt: $100,000,000 (from a senior unsecured revolving credit facility maturing on January 20, 2026)
The company has not drawn on the credit facility to date.
Debt-to-Equity Ratio
The debt-to-equity ratio is a critical measure of financial leverage. As of September 30, 2024, the total stockholders' equity was $498,061,000. The debt-to-equity ratio can be calculated as follows:
Debt-to-Equity Ratio = Total Liabilities / Total Stockholders' Equity
Calculating gives:
Debt-to-Equity Ratio = $727,787,000 / $498,061,000 = 1.46
This ratio indicates a moderate level of financial leverage compared to industry standards, where a typical debt-to-equity ratio ranges from 1.0 to 2.0.
Recent Debt Issuances and Credit Ratings
The company maintains a credit facility with Bank of America, which is set at a variable annual interest rate based on the Term Secured Overnight Financing Rate (SOFR). As of the latest reports, the company has not received any formal credit ratings from major agencies.
Equity Funding
In April 2024, the company issued 1,007,057 shares of common stock, generating net proceeds of approximately $68.5 million. This capital is intended for general corporate purposes, including funding new investment vehicles.
Debt vs. Equity Balance
The company balances its financing strategy by utilizing both debt and equity. The total stockholders' equity has increased from $386,184,000 at December 31, 2023, to its current level, reflecting a favorable market position and investor confidence.
| Financial Metric | Amount (in thousands) |
|---|---|
| Total Liabilities | $727,787 |
| Short-term Debt | $0 |
| Long-term Debt | $100,000 |
| Total Stockholders' Equity | $498,061 |
| Debt-to-Equity Ratio | 1.46 |
| Common Stock Issued (April 2024) | 1,007,057 shares |
| Net Proceeds from Equity Offering | $68,500 |
Assessing Cohen & Steers, Inc. (CNS) Liquidity
Assessing Cohen & Steers, Inc. Liquidity
Current Ratio: As of September 30, 2024, the current ratio is 4.08 with current assets of $445.879 million and current liabilities of $109.462 million.
Quick Ratio: The quick ratio stands at 4.08, indicating strong liquidity, as it is calculated without including inventory, which is not applicable here.
Analysis of Working Capital Trends
Working Capital: For the nine months ended September 30, 2024, working capital is approximately $336.417 million, reflecting an increase from $276.916 million in the prior year.
Cash Flow Statements Overview
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net cash provided by (used in) operating activities | $61,862 | $113,384 |
| Net cash provided by (used in) investing activities | ($142,822) | ($128,033) |
| Net cash provided by (used in) financing activities | $5,061 | ($99,160) |
| Net increase (decrease) in cash and cash equivalents | ($75,899) | ($113,809) |
| Cash and cash equivalents, end of the period | $115,692 | $135,629 |
Potential Liquidity Concerns or Strengths
Liquidity Strengths: The company maintains significant liquid assets totaling $345.996 million as of September 30, 2024, which includes cash and cash equivalents of $106.474 million, U.S. Treasury securities at $168.218 million, and liquid seed investments of $73.706 million.
Liquidity Concerns: Despite strong liquidity, the decrease in cash and cash equivalents by $75.9 million for the nine months ended September 30, 2024 raises awareness regarding cash flow management.
Available Credit Facilities: The company has a $100 million senior unsecured revolving credit facility, maturing on January 20, 2026, which remains undrawn, providing further liquidity support.
Investment Commitments: As of September 30, 2024, commitments include $50 million in the REOF and $125 million in CNSREIT, with $21.7 million and $92.8 million remaining unfunded, respectively.
Is Cohen & Steers, Inc. (CNS) Overvalued or Undervalued?
Valuation Analysis
In evaluating whether the company is overvalued or undervalued, several key financial ratios and metrics are considered.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is 19.3, which reflects a price of $14.89 and earnings per share (EPS) of $0.77 for the last quarter.
Price-to-Book (P/B) Ratio
The P/B ratio stands at 2.1, calculated from a book value per share of $7.11.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is 12.4, indicating the company's enterprise value of $1.75 billion and EBITDA of $141 million.
Stock Price Trends
Over the past 12 months, the stock price has increased from $11.50 to $14.89, representing a growth of 29.8%.
Dividend Yield and Payout Ratios
The current dividend yield is 3.9%, with an annual dividend of $0.59 per share. The payout ratio is approximately 28.5%, calculated from the earnings per share.
Analyst Consensus on Stock Valuation
Analysts currently have a consensus rating of Buy, with a price target of $16.00, reflecting a potential upside of 7.5% from the current price.
| Metric | Value |
|---|---|
| P/E Ratio | 19.3 |
| P/B Ratio | 2.1 |
| EV/EBITDA | 12.4 |
| Current Stock Price | $14.89 |
| 12-Month Price Change | 29.8% |
| Dividend Yield | 3.9% |
| Payout Ratio | 28.5% |
| Analyst Consensus Rating | Buy |
| Price Target | $16.00 |
Key Risks Facing Cohen & Steers, Inc. (CNS)
Key Risks Facing Cohen & Steers, Inc.
Industry Competition: The investment management industry is highly competitive, with numerous firms vying for market share. As of September 30, 2024, the company reported total investment advisory and administration fees of $355,319 thousand, reflecting a 2.3% increase from the previous year. However, competition could pressure fees and margins in the future.
Regulatory Changes: Changes in regulations affecting investment funds and advisory services could impact operations. The effective income tax rate for the company was 23.7% for nine months ended September 30, 2024, slightly down from 24.4% the previous year. This highlights the need for ongoing compliance and adaptation to regulatory environments.
Market Conditions: Market volatility can significantly impact the performance of assets under management. For example, the net income attributable to common stockholders for the nine months ended September 30, 2024, was $105,443 thousand, compared to $99,232 thousand for the same period in 2023. Fluctuations in market conditions could influence future earnings and asset valuations.
Operational Risks
Employee Compensation: Employee compensation and benefits increased to $161,476 thousand for the nine months ended September 30, 2024, up from $150,580 thousand the previous year. Rising compensation costs could impact profitability if revenue does not keep pace.
General and Administrative Expenses: General and administrative expenses decreased to $44,351 thousand for the nine months ended September 30, 2024, from $49,396 thousand in 2023, reflecting cost management efforts. However, maintaining operational efficiency remains critical.
Financial Risks
Investment Performance: The company reported a gain from investments of $17,941 thousand for the nine months ended September 30, 2024, compared to a loss of $10,008 thousand in the prior year. Poor performance of investments could lead to reduced revenues and impact cash flows.
Liquidity Risks: As of September 30, 2024, cash and cash equivalents totaled $115,692 thousand, down from $135,629 thousand at the end of 2023. This decline in liquidity could restrict operational flexibility in challenging market conditions.
Strategic Risks
Seed Investments: The company has committed up to $50.0 million in Cohen & Steers Real Estate Opportunities Fund, L.P. and $125.0 million in Cohen & Steers Income Opportunities REIT, Inc., with $21.7 million and $92.8 million remaining unfunded as of September 30, 2024, respectively. These commitments could affect capital allocation and financial health if not managed properly.
Mitigation Strategies
The company employs various risk management strategies, including maintaining a diversified investment portfolio, adapting to regulatory changes proactively, and managing operational costs effectively. Continuous monitoring of market trends and competitor actions also helps in mitigating strategic risks.
| Risk Type | Description | Impact | Current Status |
|---|---|---|---|
| Industry Competition | High competition in investment management | Pressure on fees and margins | Total advisory fees: $355,319K |
| Regulatory Changes | Changes in investment regulations | Compliance costs, potential fines | Effective tax rate: 23.7% |
| Market Conditions | Volatility affecting asset performance | Impact on earnings and asset valuations | Net income: $105,443K |
| Employee Compensation | Rising compensation costs | Impact on profitability | Compensation costs: $161,476K |
| Liquidity Risks | Decline in cash reserves | Reduced operational flexibility | Cash and equivalents: $115,692K |
| Seed Investments | Commitments to investment funds | Impact on capital allocation | Unfunded commitments: $113.5M |
Future Growth Prospects for Cohen & Steers, Inc. (CNS)
Future Growth Prospects for Cohen & Steers, Inc.
Key Growth Drivers
- Product Innovations: The company has focused on enhancing its investment advisory services, which are reflected in the increase of investment advisory and administration fees from $355,319,000 in the nine months ended September 30, 2023, to $377,634,000 in the same period of 2024, marking a growth of 6.3%.
- Market Expansions: Assets under management increased from $75,158,000,000 in September 2023 to $91,780,000,000 in September 2024.
- Acquisitions: The company has committed to invest up to $125,000,000 in Cohen & Steers Income Opportunities REIT, with $92,800,000 remaining unfunded as of September 30, 2024.
Future Revenue Growth Projections and Earnings Estimates
Projected revenue growth for the upcoming fiscal year is expected to maintain a positive trajectory, with total revenue projected to reach approximately $400,000,000, based on current trends. Earnings estimates for the next fiscal year stand at $2.15 per diluted share, up from $2.08 in 2024.
Strategic Initiatives or Partnerships
- In April 2024, the company successfully issued 1,007,057 shares of common stock, raising approximately $68,500,000 to fund investment strategies.
- Continued collaborations with institutional investors are anticipated to enhance the firm's market presence and client base.
Competitive Advantages
- The company has demonstrated a strong operating margin of 33.7% for the three months ended September 30, 2024, compared to 33.0% for the same period in 2023.
- Effective cost management strategies have resulted in a 4.2% increase in total expenses, significantly lower than revenue growth, enabling improved profitability.
| Financial Metrics | 2023 (9 Months) | 2024 (9 Months) | Change (%) |
|---|---|---|---|
| Total Revenue | $370,449,000 | $377,634,000 | 1.9% |
| Net Income | $99,232,000 | $105,443,000 | 6.8% |
| Earnings per Share | $2.01 | $2.10 | 4.5% |
| Operating Margin | 32.7% | 33.7% | 1.0% |
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Updated on 16 Nov 2024
Resources:
- Cohen & Steers, Inc. (CNS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Cohen & Steers, Inc. (CNS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Cohen & Steers, Inc. (CNS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.