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what it is
Federated Hermes gets paid to manage your cash, bond, and stock funds for institutions and everyday investors.
how it gets paid
Last year Federated Hermes made $1.8B in revenue. Money market advisory was the main engine at $0.92B, or 51% of sales.
why it's growing
Revenue grew 10.3% last year. Revenue reached $1.3 billion, up 181% vs. prior year in the provided filing data.
what just happened
Last quarter, Federated Hermes posted $1.39 in EPS versus a $1.20 estimate, a 15.83% beat.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
85/100 earnings predictability — you can trust these numbers
10.8x trailing p/e — the market's not buying it — or you found a deal
2.6% dividend yield — cash in your pocket every quarter
23.0% return on capital — every dollar works hard here
xvary composite: 61/100 — average
What they do
Federated Hermes gets paid to manage your cash, bond, and stock funds for institutions and everyday investors.
This business wins because your cash likes routine. Federated Hermes managed $829.6 billion at year-end 2024, and 76% sat in money-market funds, where clients often park cash for liquidity instead of chasing the next hot idea. Assets under management → money clients leave with the firm to invest → so what: more assets usually mean more fees, and that scale helps support a 30.0% operating margin and 26% return on equity.
How they make money
$1.8B
annual revenue · their business grew +10.3% last year
Money market advisory
$0.92B
+10.0%
Equity and fixed-income advisory
$0.29B
+9.0%
Administrative services
$0.43B
+10.3%
Other services
$0.16B
+10.3%
The products that matter
manages client portfolios
investment advisory
67% of 2024 sales
it's the main engine, generating 67% of 2024 sales. if you want to understand FHI, start with fee-paying assets and whether they keep growing.
core revenue
handles fund operations
administration services
24% of 2024 sales
this segment supplied 24% of 2024 sales. it's less glamorous than advisory, but it keeps the fee stack from leaning on one line item.
supporting fees
gathers short-term cash
money market funds
$653B
this is the $653B bucket, up 10%, and the quiet reason assets under management hit a record $871.2B.
cash complex
Key numbers
$871.2B
record AUM
Assets under management → client money on the platform → so what: more assets usually mean more fees, and this was up 9% vs. prior year.
10.8x
trailing p/e
You are paying 10.8 times trailing earnings for a business with a 30.0% operating margin and 23.0% return on capital.
30.0%
operating margin
Operating margin → profit after running the business → so what: 30 cents of operating profit on each dollar of revenue is strong for an asset manager.
2.6%
dividend yield
You get paid while you wait, and the projected dividend growth rate is 5.0%.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 80 / 100
- long-term debt $348M (8% of capital)
- net profit margin 20.7% — keeps 21 cents of every dollar in revenue
- return on equity 26% — $0.26 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in FHI 3 years ago → it's now worth $16,130.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Last quarter, Federated Hermes posted $1.39 in EPS versus a $1.20 estimate, a 15.83% beat.
Revenue reached $1.3 billion, up 181% vs. prior year in the provided filing data. The bigger operating story was AUM hitting a record $871.2 billion, led by a 10% jump in money-market assets.
$1.3B
revenue
$1.39
eps
$871.2B
aum
the number that mattered
The number that mattered was $871.2 billion in AUM because fee businesses live or die by client assets, and that was up 9% vs. prior year.
-
federated hermes posted strong third-quarter assets under management (aum).
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the tally climbed to a record $871.2 billion, up 9% vs. prior year.
-
the bulk of this growth was thanks to a 10% rise in money market assets, to $653 billion, as investors continued to favor higher yields over bank deposits.
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equity assets also impressed, advancing 13%, to $94.7 billion, driven by healthy demand for the federated hermes mdt large cap growth fund and the mdt all cap core fund.fixed-income assets rose at a low single-digit pace, to $101.8 billion, supported by inflows into the federated hermes ultrashort bond and short-term income funds.
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moreover, september-period results were equally encouraging.
source: company earnings report, 2026
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What could go wrong
the top threat is a reversal in money-market flows after rates ease.
med
client assets can leave faster than costs fall
this is an asset manager. when markets drop or clients move money out, the fee base shrinks first and expenses do not disappear on command.
67% of revenue comes from investment advisory fees, so the core line moves fast.
med
the $653B money-market bucket is rate-sensitive
money market assets rose to $653B as investors chased higher yields. if that bid fades, recent assets momentum cools fast.
record $871.2B assets under management looks less impressive if the biggest bucket starts leaking.
med
fee pressure hits a 20.3% net margin quickly
a 10.8x p/e looks cheap, but cheap stocks get cheaper when the market thinks margins have peaked or fees are getting squeezed.
with a 20.3% net margin, even modest pricing pressure would hit profit.
med
the dividend helps, but it is not a shield
2.6% yield gives you some cash back while you wait. it does not stop the stock from re-rating if the fee story softens.
if earnings stop holding near $5.10 per share, the market will start testing that income narrative instead of celebrating it.
the risk stack is simple: if client assets stop climbing, the 67% of revenue tied to advisory fees does not stay insulated for long.
source: institutional data · regulatory filings · risk analysis
Pay attention to
key metric
record assets at $871.2B
this is the number carrying the story. if assets keep rising, the cheap multiple gets easier to defend.
trend
money market assets at $653B
higher yields helped here. you want to see whether that cash stays put as rate expectations move around.
risk
advisory fees are 67% of revenue
that is efficient in good markets and exposed in bad ones. you do not need a lecture to see the concentration.
earnings
profitability above 20%
q4 eps was $1.34 and full-year eps was $5.10. the next question is whether the 20.3% net margin still holds.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts see a normal next 12 months, not a breakout.
risk profile
average
stability score 3 — this sits in the middle of the risk spectrum. not especially fragile, not a bunker stock.
chart momentum
average
technical score 3 — the chart is behaving like a normal stock, which means the thesis still has to come from fundamentals.
earnings predictability
85 / 100
management's results have been reliable. in human-speak: this usually is not an earnings-drama stock.
source: institutional data
Institutional activity
165 buyers vs. 175 sellers in 3q2025. total institutional holdings: 68.6M shares.
source: institutional data
Price targets
3-5 year target range
$45
$72
$54
current price
$59
target midpoint · +10% from current · 3-5yr high: $85 (+60% · 14% ann'l return)
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