Gary Cheng

Financial Engines: An Emerging Asset Manager Trading At A Lofty Valuation

Financial Engines (NASDAQ:FNGN) is a registered investment adviser focused on providing investment management advice and services to participants in employer-sponsored 401(k) plans. The company's stock has been on a winning streak for the past year as its share price tripled. The company has enjoyed phenomenal success in the past few years as asset under management (AUM) more than quadrupled for the 2008 - 2012 period and revenue grew at a CAGR (compound annual growth rate) of 40% to reach $186 million in 2012.

At the current market capitalization of $2.6 billion, Financial Engines is trading at a very lofty valuation of 113 times trailing twelve-month earnings. The valuation is equally high on a forward basis at 96 times...

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