SS&C Technologies has seen its stock fall 25.3% over the past six months to $66.39, and analysts are pointing to three reasons to avoid the shares. The company's adjusted operating margin has shrunk by 1.3 percentage points over the last five years, reaching 38.3% in the trailing 12 months, while its free cash flow margin dropped 2.3 percentage points over the same period to 22.8%. Additionally, SS&C's five-year average return on invested capital stands at just 6.8%, well below the 25%-plus generated by top business services firms. Although the stock trades at a reasonable 9.3 times forward earnings, the weakening fundamentals present too much downside risk, leading analysts to recommend looking elsewhere.
SS&C Technologies Holdings IncArticle reports margin declines, low capital returns, and analyst caution on fundamentals.