Earnings Preview: TD Ameritrade Holding Corporation

| About: TD Ameritrade (AMTD)

Company Profile

TD Ameritrade Holding Corporation (NASDAQ:AMTD), through its subsidiaries, provides securities brokerage services and technology-based financial services to retail investors, traders, and independent registered investment advisors (RIA) in the United States.

TD Ameritrade is scheduled to report its third quarter earnings results on July 17, 2012, before market open.

Technical Overview

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TD Ameritrade has a market cap of $9.05 billion and it is currently trading around $16.5 with a 52-week range of $13.43-$20.76. The stock has fallen 11.62% year to date. The following table provides the key financial ratios for TD Ameritrade:

Key Ratio Value
PEG 1.25
P/E 15.28
Forward P/E 13.52
Profit Margin 22.42%
Return On Assets (ROA) 3.31%
Return On Equity (ROE) 14.55%

Recent News

  • On June 7, 2012, TD Ameritrade announced company metrics for May 2012. Monthly activities included an average of 370,000 client trades per day in May 2012, down 2% from May 2011 and up 1% from April 2012; and $431.7 billion in total client assets as of May 31, 2012, up 3 percent from May 2011 and down 4 percent from April 2012.
  • On May 8, 2012, TD Ameritrade announced company metrics for April 2012. Monthly activities included an average of 368,000 client trades per day in April 2012, down 8% from April 2011 and down 3% from March 2012; and $450.9 billion in total client assets as of April 30, 2012, up 7% from April 2011 and flat from March 2012.
  • On April 23, 2012, Christine Gaze has been named the new director of practice management for TD Ameritrade Institutional, a division of TD Ameritrade, Inc.
  • On April 19, 2012, TD Ameritrade Institutional launched thinkpipes platform, an advanced, highly customizable trading platform for advisors.

Here's a list of recent changes to analyst ratings:

  • On July 10, 2012, BGB Securities upgraded TD Ameritrade shares from SELL to HOLD.
  • On July 9, 2012, Goldman Sachs downgraded TD Ameritrade from NEUTRAL to SELL and set the price target as $15.
  • On June 4, 2012, Citi downgraded TD Ameritrade from BUY to NEUTRAL.
  • On April 23, 2012, Ned Davis Research downgraded TD Ameritradefrom NEUTRAL to SELL.
  • On April 18, 2012, EVA Dimensions, LLC, downgraded TD Ameritradefrom HOLD to UNDERWEIGHT.
  • On April 9, 2012, Goldman Sachs resumed coverage on TD Ameritrade with a NEUTRAL rating and set the price target as $20.50.

Analyst Guidance and Earnings History

The third quarter revenues are expected to be $665.64 million, compared with $684.78 million for the same quarter last year. Earnings per share for the third quarter are expected to be 26 cents a share, down from 27 cents a share in the year-ago period.

The average price target from analyst for TD Ameritrade is $18.89, with average rating as OVERWEIGHT. Out of the last four quarters, TD Ameritrade has met or exceeded the EPS estimates two times. The following chart shows the analyst estimates history and the actual EPS results:

The following chart shows the annual summary of sales and net income for TD Ameritrade:


The Charles Schwab Corporation (NYSE:SCHW), E*TRADE Financial Corporation (NASDAQ:ETFC), Citigroup Inc. (NYSE:C) and Morgan Stanley (NYSE:MS) are considered the major competitors for TD Ameritrade. The table below provides the key metrics for these companies:

Sources: Some of the data is taken from Google Finance, Yahoo Finance, Nasdaq, Finviz and investor sites.

Disclaimer: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research.

Additional Disclosure: I change my positions very frequently and may initiate either long or short positions on the abovementioned stocks at any time.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position on AMTD, C, ETFC, MS, SCHW over the next 72 hours.