SEI Investments is a cash-rich, high-margin financial infrastructure compounder, with SWP conversions, private-market outsourcing, Stratos distribution, and buybacks supporting an attractive five-year probability-weighted target of $179.29.
Overview
SEI Investments is a global financial-technology, investment-operations, and asset-management provider whose four segments serve private banks, investment advisors, investment managers, and institutional investors. Its “One SEI” architecture integrates trust, custody, processing, and investment programs, producing high switching costs and more than 90% recurring revenue. **Q2 2026 demonstrated strong operating leverage:** GAAP revenue increased 14.7% year over year to $641.62 million, adjusted diluted EPS rose 38.3% to $1.66, and adjusted operating margin expanded 500 basis points to 32.3%. GAAP EPS declined 10.7% to $1.59 only because the prior-year period included a $94.4 million after-tax gain from the Family Office Services sale. Growth is supported by record alternative mandates, SWP bank conversions, Stratos consolidation, and ETF AUM growth from $3 billion to over $8 billion. **The valuation case is driven by compounding rather than near-term re-rating:** the five-year model produces a $179.29 probability-weighted share price from a $110.39 starting price, with 7.0% base-case revenue CAGR, 29.5% net margin, and ongoing buybacks. Near-term catalysts include further alternative mandates, SWP conversions, Stratos inflows, and margin expansion.