This Under-the-Radar Fintech Stock Is About to Break Out in 2026, and You've Never Heard of It

SEI Investments (NASDAQ: SEIC) is not a household name in the asset management business, but it is a stock that investors should keep an eye on in 2026.

Asset managers have generally performed well in the past few years, due to the now three-plus-year bull market. Basically, when the markets are up, asset management firms do well because many of their fees are based on assets under management.

But SEI is not your typical asset manager in the same vein as BlackRock or Vanguard. Those companies serve retail investors as well as institutional investors; SEI mostly caters to institutional investors.

It is widely considered a fintech, because it provides the technology for fund managers, wealth managers, pension funds, investment advisors, banks, and retirement plan sponsors, among others, to handle various functions. These functions include asset management, fund accounting, settlement, back-office operations, transfer services, record keeping, custody, regulatory compliance support, IT support, and cybersecurity.

It offers what is often called a turnkey asset management platform, where it handles pretty much all of these functions for clients. But clients can also pick and choose the services they want on an a la carte basis, or acquire services in bundles.

Analysts see big upside

Wall Street analysts are generally bullish on SEI, as the stock has a 12-month median price target of $109.50 per share, which would represent about 27%. Further, it is rated a buy by 80% of the analysts that cover it.

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SEI clearly has some wind at its back, as revenue climbed 8% year over year for the first nine months of 2025, while expenses only rose 5%. Earnings jumped 32% through the first nine months, while its operating margin was 28%, up 8% compared to the first nine months of the previous year. In addition, its return on equity, which is how much profit it makes from every dollar of shareholder equity, is 27.7% -- which is among the highest in the sector.

This gives the firm an abundance of capital to keep investing in its technology and platform. CEO Ryan Hicke said on a recent earnings call the firm expects to increase its margins in the quarters ahead through continued cost optimization and targeted investments in technology, automation, and talent.

Hicke said the company is seeing a surge in demand for its services as more fund managers and institutional investors are outsourcing these functions.

Part of it is the digital transformation that is going on. It requires constant investment and upgrades by institutional investors to keep their technology up to date, and more and more, they are finding it more efficient to outsource this to fintechs that have already made the investments.

A surge in outsourcing

The other part of it is an increasingly complex regulatory environment. A 2025 report by asset manager Carne Group said the "complicated and convoluted nature of modern investment regulation continues to pose problems for managers," with 98% saying regulation will become more complicated by 2027.

The report also found that fund managers are under greater scrutiny by their clients for things like reporting, transparency, and corporate governance. This is also driving them to outsource. It all adds up to that surging demand.

That same survey found that 88% of fund managers said they planned to increase their use of outsourcing for various functions over the next 12 months.

SEI is not only one of the most efficient companies in its space, it is also one of the big four dominant players, so it stands to gain from the overall increase in outsourcing.

The other big factor is its valuation. Trading at 15 times forward earnings, it is relatively cheap for a fintech. If you are looking for a relatively cheap stock with some significant catalysts for growth and industry-leading efficiency, SEI Investments might be one stock to get to know.

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool recommends BlackRock. The Motley Fool has a disclosure policy.