T. Rowe Price Stock Down 6.4% as Q4 Earnings Miss, Expenses Rise Y/Y

T. Rowe Price Group, Inc.’s TROW fourth-quarter 2025 adjusted earnings per share (EPS) of $2.44 missed the Zacks Consensus Estimate of $2.47. Nevertheless, the bottom line increased 15.1% year over year.

Shares of the company lost nearly 6.4% in the early trading session following the release of lower-than-expected results. A full day’s trading session will depict a clearer picture.

TROW’s results were affected by higher expenses. Nonetheless, an increase in investment advisory fees and capital allocation-based income supported the results. Also, higher assets under management (AUM) were another positive.

The results included certain items. After considering those, net income attributable to T. Rowe Price (on a GAAP basis) was $445.3 million, which rose 1.2% from the prior-year quarter.

In 2025, adjusted earnings of $9.72 per share missed the consensus estimate of $9.75 but rose 4.2% year over year. Net income attributable to T. Rowe Price was $2.1 billion, down nearly 1% year over year.

TROW’s Revenues Increase, Expenses Rise

Net revenues rose 6% year over year to $1.93 billion. Further, the top line surpassed the Zacks Consensus Estimate of $1.92 billion.

In 2025, net revenues were $7.31 billion, up 3.1% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $7.30 billion.

Investment advisory fees rose 4.2% year over year to $1.74 billion.

Capital allocation-based income increased to $40.8 million from a loss of $5.2 million in the prior-year quarter.

Total operating expenses increased 16.5% year over year to $1.46 billion in the reported quarter. On an adjusted basis, operating expenses were $1.25 billion, up 2.2% year over year.

TROW’s AUM Rises, Liquidity Position Strong

As of Dec. 31, 2025, total AUM grew 10.5% year over year to $1.77 trillion.

In the fourth quarter, net market appreciation and income of $33.9 billion favorably impacted T. Rowe Price’s AUM, partially offset by net cash outflows of $25.5 billion.

The company had substantial liquidity, including cash and cash equivalents of $3.38 billion as of Dec. 31, 2025, up from $2.65 billion as of Dec. 31, 2024. This will enable TROW to keep investing.

TROW’s Capital Distribution Activities

T. Rowe Price distributed a total of $426 million to shareholders through common stock dividends and share repurchases in the fourth quarter.

Our View on TROW

TROW’s solid AUM balance, broadening distribution reach and efforts to diversify business through acquisitions and product enhancements are likely to support top-line growth. However, an elevated expense base and excessive reliance on investment advisory fees are concerns. The current tough operating environment is a headwind. Nonetheless, a solid liquidity position enables sustainable capital distributions.

T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise

T. Rowe Price Group, Inc. price-consensus-eps-surprise-chart | T. Rowe Price Group, Inc. Quote

Currently, TROW carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of T. Rowe Price’s Peers

Invesco’s IVZ fourth-quarter 2025 adjusted earnings of 62 cents per share surpassed the Zacks Consensus Estimate of 57 cents. The bottom line increased 19.2% from the prior-year quarter.

The results of IVZ have been primarily aided by an increase in adjusted revenues. Moreover, growth in the assets under management reached record levels, supporting the results to an extent. However, an increase in adjusted operating expenses was a headwind.

SEI Investments Co.’s SEIC fourth-quarter 2025 earnings of $1.38 per share beat the Zacks Consensus Estimate of $1.34. Moreover, the bottom line reflected a rise of 16% from the prior-year quarter.

SEIC’s results were aided by higher revenues and a rise in assets under management. However, higher expenses acted as a spoilsport.

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This article originally published on Zacks Investment Research (zacks.com).

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