SEI Investments (SEIC) has drawn investor attention after updating its long running share repurchase program, confirming that it bought 1,300,000 shares for US$112.4 million in the quarter and has now completed 83.92% of the authorized buyback.

The updated buyback comes alongside a solid run in SEI Investments' stock, with a year to date share price return of 18.96% and longer term total shareholder returns of 60.61% over three years and 73.86% over five years. Recent earnings and the launch of the SEI QiM U.S. Equity Factor Allocation Active ETF have kept investor focus on growth opportunities and risk appetite.

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SEI Investments now sits on a strong share price run, accelerating buybacks and mixed earnings trends. Is the latest jump mainly a read on the underlying business, or a sentiment swing that has run ahead of fair value?

Most Popular Narrative: 5.8% Undervalued

With SEI Investments last closing at $98.75 versus a narrative fair value of $104.86, the current price sits below where the most followed narrative places it. This puts the focus on how future earnings quality and valuation could evolve from here.

SEI's continued and proactive investment in modern technology platforms targeting scalability, automation, and cost efficiency positions the company to potentially capitalize on increasing demand for digital transformation and outsourcing within financial services.

Curious what sits underneath that tech heavy thesis for SEI Investments, and how revenue growth, margins and future P/E expectations are stitched together into one valuation story?

Result: Fair Value of $104.86 (UNDERVALUED)

However, SEI Investments still faces pressure from heavy technology and talent spending, as well as exposure to lumpy, concentrated client wins that could challenge the current earnings narrative.

Next Steps

With both risks and rewards in play for SEI Investments, the key question is how you see the balance today and whether the story still fits your risk tolerance. To weigh the tension between upside potential and the concerns highlighted by other investors, start by reviewing the 3 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.