Invesco (IVZ) Down 2.8% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Invesco (IVZ). Shares have lost about 2.8% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Invesco due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Invesco Ltd. before we dive into how investors and analysts have reacted as of late.

Invesco’s Q4 Earnings Beat as AUM, Revenues Increase Y/Y

Invesco’s 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.

Results were primarily aided by an increase in adjusted revenues. Moreover, growth in the AUM balance to record levels supported the results. However, an increase in adjusted operating expenses was a headwind.

Results in the reported quarter excluded the negative impact of a non-cash intangible impairment charge of $1.8 billion. Considering it, net loss attributable to common shareholders (GAAP basis) was $1.19 billion or $2.61 per share against net income of $209.3 million or 46 cents per share in the year-ago quarter.

Full-year adjusted earnings of $2.03 per share surpassed the Zacks Consensus Estimate of $1.99. The bottom line increased 18.7% from the previous year. Net loss attributable to common shareholders (GAAP basis) was $726.3 million or $1.60 per share against net income of $538 million or $1.18 per share in 2024.

Adjusted Revenues Improve, Adjusted Expenses Rise

Adjusted net revenues in the quarter were $1.26 billion, up 8.8% year over year. The top line marginally surpassed the Zacks Consensus Estimate of $1.25 billion. The rise in revenues was driven by higher average AUM and revenues earned from Invesco QQQ Trust following its conversion.

Adjusted net revenues in 2025 were $4.66 billion, up 5.9% year over year. The top line surpassed the Zacks Consensus Estimate of $4.58 billion.

Quarterly adjusted operating expenses were $801.1 million, up 4.4% year over year.

The adjusted operating margin was 36.4%, up from 33.7% a year ago.

AUM Balance Increases

As of Dec. 31, 2025, AUM was a record $2.17 trillion, up 17.5% year over year. The average AUM at the end of the fourth quarter totaled $2.16 trillion, up 18.5%. The company witnessed long-term net inflows of $19.1 billion in the reported quarter.

Decent Balance Sheet

As of Dec. 31, 2025, cash and cash equivalents were $1.04 billion compared with $973.1 million as of Sept. 30, 2025. The long-term debt was $1.83 billion.

Share Repurchase Update

In the reported quarter, Invesco repurchased 1 million shares for $25 million.

Outlook

Management expects one-time implementation costs of the Alpha investment platform to be $10-$15 million per quarter, trending toward about $15 million per quarter as implementation progresses, with completion targeted by the end of 2026. Further, as more AUM transitions onto the platform during 2026, the incremental expense associated with AUM on the system is expected to build through the year, reaching approximately $10 million per quarter later in the year. Hence, the combined costs related to the hybrid platform are expected to be $25 million to $30 million higher in 2026 than in 2025.

Beginning in the third quarter of 2026, operating income is expected to be negatively impacted initially by the Canada fund deal, including an operating expense reduction of $5 million to $10 million per quarter (i.e., a cost benefit that partially offsets other headwinds). Over time, the operating expense benefit is expected to move closer to about $10 million per quarter.

The changes to retirement eligibility criteria for long-term awards will change the timing of retirement-related expense recognition in 2026. The company expects the net full-year impact to be an increase of nearly $10 million in compensation expenses. This includes compensation expenses being about $30 million higher in the first quarter on a sequential basis, followed by lower compensation expenses for the remainder of the year, resulting in the net $10 million full-year impact.

Further, the company typically experiences seasonally higher compensation expense in the first quarter of 2026 due to payroll tax and other compensation-related expenses resetting, which is expected to total approximately $20 million.

Non-GAAP effective tax rate is expected to be in the range of 25-26% for the first quarter of 2026.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in estimates review.

VGM Scores

Currently, Invesco has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Invesco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Invesco is part of the Zacks Financial - Investment Management industry. Over the past month, Cohen & Steers Inc (CNS), a stock from the same industry, has gained 5.7%. The company reported its results for the quarter ended December 2025 more than a month ago.

Cohen & Steers reported revenues of $143.8 million in the last reported quarter, representing a year-over-year change of +2.9%. EPS of $0.81 for the same period compares with $0.78 a year ago.

Cohen & Steers is expected to post earnings of $0.76 per share for the current quarter, representing a year-over-year change of +1.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Cohen & Steers. Also, the stock has a VGM Score of F.

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

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