📊 FHI Key Takeaways
Is Federated Hermes, Inc.. (FHI) a Good Investment?
Federated Hermes demonstrates exceptional financial health with strong profitability (22.4% net margin), robust return on equity (33.7%), and solid revenue growth (10.3% YoY). The company generates substantial free cash flow ($294.6M) with conservative leverage (0.29x debt/equity), positioning it well for sustainable operations and shareholder returns.
Federated Hermes shows strong core fundamentals with double-digit revenue growth, high operating and net margins, and excellent returns on equity and assets. The balance sheet is healthy, with ample cash, low leverage, and strong liquidity, while the asset-light model supports robust free cash flow. The main caution is that earnings growth lagged revenue growth and EPS far outpaced net income, suggesting per-share gains may rely partly on capital allocation rather than purely underlying profit expansion.
Why Buy Federated Hermes, Inc.. Stock? FHI Key Strengths
- Excellent net profit margin of 22.4% with net income growth of 4.7% YoY demonstrating pricing power and operational efficiency
- Strong return metrics with ROE of 33.7% and ROA of 18.1% indicating superior capital deployment and asset utilization
- Healthy balance sheet with low leverage (0.29x debt/equity), substantial cash position ($582.5M), and strong liquidity (2.75x current ratio)
- Consistent free cash flow generation ($294.6M) representing 16.4% FCF margin, enabling reinvestment and capital allocation flexibility
- Double-digit revenue growth (10.3% YoY) in investment advisory sector indicates market demand and competitive positioning
- Strong profitability profile with 28.5% operating margin, 22.4% net margin, and high ROE/ROA
- Healthy financial position with $582.54M cash, 2.75x current ratio, and modest 0.29x debt-to-equity
- Good growth quality overall, with 10.3% revenue growth and high free cash flow generation from an asset-light business
FHI Stock Risks: Federated Hermes, Inc.. Investment Risks
- Operating margin of 28.5% is strong but dependent on asset management industry cyclicality and market conditions affecting Assets Under Management (AUM)
- Significant insider activity (12 Form 4 filings in 90 days) warrants monitoring for potential insider concerns or strategic transactions
- Asset-management-dependent business model creates revenue sensitivity to market volatility and client redemptions that may not be captured in current metrics
- Net income growth of 4.7% trailed revenue growth, which may indicate margin pressure or higher expense growth
- Operating cash flow of $297.35M was well below net income of $403.30M, so cash conversion should be monitored
- EPS growth of 58.8% materially exceeded net income growth, implying per-share performance may be boosted by share count reduction or other non-operational factors
Key Metrics to Watch
- Assets Under Management (AUM) growth and composition by strategy type
- Client retention and net inflows/outflows as leading indicators of recurring revenue quality
- Operating margin trends as proxy for operational leverage and cost discipline
- Free cash flow consistency and deployment strategy for capital allocation
- Net income growth relative to revenue growth
- Operating cash flow conversion versus net income
Federated Hermes, Inc.. (FHI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 2.75x current ratio provides a solid financial cushion.
FHI Profit Margin, ROE & Profitability Analysis
FHI vs Market Sector: How Federated Hermes, Inc.. Compares
How Federated Hermes, Inc.. compares to Market sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Federated Hermes, Inc.. Stock Overvalued? FHI Valuation Analysis 2026
Based on fundamental analysis, Federated Hermes, Inc.. appears fundamentally strong relative to the Market sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Federated Hermes, Inc.. Balance Sheet: FHI Debt, Cash & Liquidity
FHI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Federated Hermes, Inc..'s revenue has grown significantly by 24% over the 5-year period, indicating strong business expansion. The most recent EPS of $3.40 reflects profitable operations.
FHI Revenue Growth, EPS Growth & YoY Performance
FHI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $408.5M | $87.5M | $1.06 |
| Q2 2025 | $402.6M | $21.0M | $0.20 |
| Q1 2025 | $396.4M | $75.0M | $0.89 |
| Q3 2024 | $402.7M | $75.0M | $0.86 |
| Q2 2024 | $402.6M | $21.0M | $0.20 |
| Q1 2024 | $382.2M | $69.6M | $0.78 |
| Q3 2023 | $381.1M | $69.5M | $0.78 |
| Q2 2023 | $366.0M | $57.7M | $0.64 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Federated Hermes, Inc.. Dividends, Buybacks & Capital Allocation
FHI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Federated Hermes, Inc.. (CIK: 0001056288)
📋 Recent SEC Filings
❓ Frequently Asked Questions about FHI
What is the AI rating for FHI?
Federated Hermes, Inc.. (FHI) has a Combined AI Rating of BUY from Claude (STRONG BUY) and ChatGPT (BUY) with 86% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are FHI's key strengths?
Claude: Excellent net profit margin of 22.4% with net income growth of 4.7% YoY demonstrating pricing power and operational efficiency. Strong return metrics with ROE of 33.7% and ROA of 18.1% indicating superior capital deployment and asset utilization. ChatGPT: Strong profitability profile with 28.5% operating margin, 22.4% net margin, and high ROE/ROA. Healthy financial position with $582.54M cash, 2.75x current ratio, and modest 0.29x debt-to-equity.
What are the risks of investing in FHI?
Claude: Operating margin of 28.5% is strong but dependent on asset management industry cyclicality and market conditions affecting Assets Under Management (AUM). Significant insider activity (12 Form 4 filings in 90 days) warrants monitoring for potential insider concerns or strategic transactions. ChatGPT: Net income growth of 4.7% trailed revenue growth, which may indicate margin pressure or higher expense growth. Operating cash flow of $297.35M was well below net income of $403.30M, so cash conversion should be monitored.
What is FHI's revenue and growth?
Federated Hermes, Inc.. reported revenue of $1.8B.
Does FHI pay dividends?
Federated Hermes, Inc.. pays dividends, with $104.9M distributed to shareholders in the trailing twelve months.
Where can I find FHI SEC filings?
Official SEC filings for Federated Hermes, Inc.. (CIK: 0001056288) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is FHI's EPS?
Federated Hermes, Inc.. has a diluted EPS of $5.13.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is FHI a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Federated Hermes, Inc.. has a BUY rating with 86% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is FHI stock overvalued or undervalued?
Valuation metrics for FHI: ROE of 33.7% (sector avg: 15%), net margin of 22.4% (sector avg: 12%). Higher ROE suggests strong returns relative to peers.
Should I buy FHI stock in 2026?
Our dual AI analysis gives Federated Hermes, Inc.. a combined BUY rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is FHI's free cash flow?
Federated Hermes, Inc..'s operating cash flow is $297.3M, with capital expenditures of $2.8M. FCF margin is 16.4%.
How does FHI compare to other Market stocks?
Vs Default sector averages: Net margin 22.4% (avg: 12%), ROE 33.7% (avg: 15%), current ratio 2.75 (avg: 1.8).
Why is FHI's return on equity (ROE) so high?
Federated Hermes, Inc.. has a return on equity of 33.7%, significantly above the Market sector average of 15%. A high ROE indicates the company is efficient at generating profits from shareholder equity. This is supported by a 22.4% net margin.