Victory Capital Holdings, Inc. (VCTR) | Investment Case

1. Company Snapshot

1.a. Company Description

Victory Capital Holdings, Inc., together with its subsidiaries, operates as an asset management company worldwide.It offers investment advisory, fund administration, fund compliance, fund transfer agent, and fund distribution services.The company provides specialized investment strategies to institutions, intermediaries, retirement platforms, and individual investors.

As of December 31, 2021, its franchises and solutions platform managed a set of 130 investment strategies for a range of institutional and retail clients, and direct investors.The company has strategic alliance with Xavier University of Louisiana.Victory Capital Holdings, Inc.

was incorporated in 2013 and is headquartered in San Antonio, Texas.

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1.b. Last Insights on VCTR

Strong second-quarter results, driven by a 60% year-over-year revenue increase, boosted Victory Capital's performance. The company's adjusted diluted EPS of $1.57 surpassed estimates, and its board authorized a $500 million share repurchase plan, demonstrating confidence in its financial condition. Additionally, Victory Capital's assets under management (AUM) rose 3.2% sequentially to $298.6 billion in June, driven by gains across equity, solutions, and fixed-income categories.

1.c. Company Highlights

Last Price	63.59
Change Percentage	0.81%
Open	62.94
Previous Close	63.08
Market Cap ( Millions)	4159
Volume	195841
Year High	73
Year Low	47
M A 50	63.85
M A 200	63.74

FCF Yield	7.90%
Dividend Yield	2.97%
ROE	22.24%
Debt / Equity	0.00%
Net Debt / EBIDTA	-21.49%
Price To Book	1.75
Price Earnings Ratio	10.62
Price To FCF	12.66
Price To sales	3.57
EV / EBITDA	7.51

2. Victory Capital's Q3 2025 Earnings: Strong Revenue Growth and Margin Expansion

Victory Capital reported a robust third quarter with revenues increasing 3% quarter-over-quarter to $361.2 million, driven by a 7% rise in average assets and a fee rate of 47.2 basis points. The company's adjusted EBITDA margin expanded to 52.7%, resulting in adjusted EBITDA of $190.5 million. Adjusted earnings per diluted share rose to $1.63, beating estimates of $1.6 and representing a 4% increase from the second quarter and 20% higher than the quarter before the Amundi transaction.

Publication Date: Nov -11

                                    📋 Highlights
                                    Adjusted EBITDA Milestone::
                                                Achieved a record $191 million in adjusted EBITDA (52.7% margin), up 57% YoY.
Pioneer Integration Success::
                                                Delivered $86 million in annualized net expense synergies ahead of schedule.
ETF Growth Surge::
                                                VictoryShares saw $5.4B in YTD net flows, driving 53% organic growth.
Capital Returns::
                                                Returned $163M to shareholders (Q3) and over $272M year-to-date.
Balance Sheet Strength::
                                                Net leverage ratio at 1.1x with $355M remaining in share repurchase authorization.

                                

Operational Highlights

The company saw significant growth in its ETF platform, VictoryShares, with year-to-date positive net flows of $5.4 billion, representing a 53% organic growth rate. Investment performance remains excellent, with nearly half of mutual fund and ETF AUM ranking in the top quartile based on Morningstar's 3-year rankings. The integration of Pioneer Investments is ahead of plan, with $86 million of net expense synergies achieved on a run-rate basis.

Capital Allocation and M&A

Victory Capital's capital allocation strategy is focused on organic and inorganic growth opportunities. The company has a strong balance sheet with $116 million of cash, providing financial flexibility to pursue growth objectives. The company is exploring various structures in private markets and alternatives, including ownership, investment, and acquisition, with a focus on creating shareholder value through earnings growth, margin expansion, and organic growth.

Valuation and Outlook

With a P/E Ratio of 10.23 and an EV/EBITDA of 7.38, the company's valuation appears reasonable considering its strong growth prospects. Analysts estimate next year's revenue growth at 16.9%. The company's ROE of 22.24% and ROIC of 10.82% indicate a strong ability to generate returns on equity and invested capital. The dividend yield of 3.09% provides a relatively attractive income stream. Overall, Victory Capital's strong financial performance, solid operational highlights, and reasonable valuation make it an attractive investment opportunity.

3. NewsRoom

Is the Options Market Predicting a Spike in Victory Capital Holdings Stock?

Nov -19

Source: zacks.com

Victory Capital's October AUM Rises Sequentially to $313B on Equity Gains

Nov -12

Source: zacks.com

Victory Capital Reports October 2025 Total Client Assets

Nov -11

Source: businesswire.com

Victory Capital Holdings, Inc. (VCTR) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

Victory Capital (VCTR) Reports Q3 Earnings: What Key Metrics Have to Say

Nov -07

Source: zacks.com

Victory Capital Holdings (VCTR) Surpasses Q3 Earnings Estimates

Nov -07

Source: zacks.com

Victory Capital Reports Strong Third-Quarter Results

Nov -06

Source: businesswire.com

Teacher Retirement System of Texas Sells 7,049 Shares of Victory Capital Holdings, Inc. $VCTR

Nov -06

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Investment Management Fees - Mutual Funds (Victory Funds)

Expected Growth: 5.0%

Victory Funds' 5.0% growth in investment management fees is driven by increasing assets under management (AUM) from successful fund launches, strong investment performance, and strategic acquisitions. Additionally, the company's diversified product offerings, expanding distribution channels, and growing demand for actively managed funds also contribute to the growth.

Investment Management Fees - Separate Accounts and Other Vehicles

Expected Growth: 5.0%

Victory Capital Holdings, Inc.'s 5.0% growth in Investment Management Fees - Separate Accounts and Other Vehicles is driven by increasing assets under management, expansion of distribution channels, and a growing demand for customized investment solutions. Additionally, the company's strategic acquisitions and partnerships have enhanced its product offerings, contributing to the growth.

Fund Administration and Distribution Fees - Administration Fees - Mutual Funds (Victory Funds)

Expected Growth: 5.0%

Victory Funds' 5.0% growth in administration fees is driven by increasing assets under management (AUM), fueled by strong investment performance, successful product launches, and strategic acquisitions. Additionally, the company's focus on operational efficiency and cost savings initiatives have contributed to the growth.

Fund Administration and Distribution Fees - Transfer Agent Fees - Mutual Funds (Victory Funds III)

Expected Growth: 5.0%

Victory Funds III's 5.0% growth in Fund Administration and Distribution Fees, driven by increased assets under management, is attributed to strong investment performance, effective distribution channels, and a growing retail investor base. Additionally, the transfer agent fees benefit from the fund's expanding presence in the market, resulting in higher transaction volumes.

Fund Administration and Distribution Fees - Distribution Fees - Mutual Funds (Victory Funds)

Expected Growth: 5.0%

Victory Funds' 5.0% growth in Distribution Fees is driven by increasing assets under management (AUM) from successful fund launches, strategic partnerships, and expanding distribution channels. Additionally, the company's focus on investment performance, risk management, and customer service has led to increased investor confidence, resulting in higher sales and revenue growth.

Investment Management Fees - Exchange Traded Funds (Victory Shares)

Expected Growth: 5.0%

Victory Shares' 5.0% growth in Investment Management Fees is driven by increasing adoption of ETFs, expansion into new markets, and strategic partnerships. Strong investment performance, competitive pricing, and a diverse product suite also contribute to growth. Additionally, Victory Capital's robust distribution network and advisor engagement efforts support the segment's expansion.

Investment Management Fees - Performance-based Fees - Mutual Funds (Victory Funds III)

Expected Growth: 5.0%

Victory Funds III's 5.0% growth in performance-based fees is driven by strong investment performance, increasing assets under management, and a competitive fee structure. The fund's ability to attract and retain investors, coupled with its successful investment strategies, has led to an increase in revenue from performance-based fees.

Fund Administration and Distribution Fees - Administration Fees - Exchange Traded Funds (Victory Shares)

Expected Growth: 5.0%

Victory Shares' 5.0% growth in administration fees is driven by increasing demand for ETFs, expansion of distribution channels, and strategic partnerships. The rise of passive investing and growing adoption of ETFs among institutional and retail investors also contribute to this growth. Additionally, Victory Capital's strong brand reputation and competitive pricing strategy support the segment's growth.

Investment Management Fees - Performance-based Fees - Separate Accounts and Other Vehicles

Expected Growth: 5.0%

Victory Capital Holdings, Inc.'s 5.0% growth in Investment Management Fees, driven by Performance-based Fees and Separate Accounts and Other Vehicles, is attributed to strong investment performance, increased assets under management, and strategic acquisitions. Additionally, the company's diversified product offerings, robust distribution network, and cost discipline have contributed to its growth momentum.

7. Detailed Products

Institutional Asset Management

Victory Capital Holdings, Inc. offers institutional asset management services to institutional clients, including pension funds, endowments, and foundations.

Retail Asset Management

The company provides retail asset management services to individual investors, financial advisors, and broker-dealers.

US Equity

Victory Capital Holdings, Inc. offers a range of US equity investment strategies, including large-cap, mid-cap, and small-cap equities.

Fixed Income

The company provides fixed income investment strategies, including high-yield bonds, investment-grade bonds, and municipal bonds.

Solutions Platform

Victory Capital Holdings, Inc. offers a solutions platform that provides investors with access to a range of investment strategies and products.

Exchange-Traded Funds (ETFs)

The company offers a range of ETFs that track various market indices, sectors, and asset classes.

8. Victory Capital Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Victory Capital Holdings, Inc. is medium due to the presence of alternative investment products and services offered by competitors.

Bargaining Power Of Customers

The bargaining power of customers for Victory Capital Holdings, Inc. is low due to the company's diversified client base and lack of concentration of clients.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Victory Capital Holdings, Inc. is medium due to the company's dependence on a few key suppliers for certain services.

Threat Of New Entrants

The threat of new entrants for Victory Capital Holdings, Inc. is high due to the relatively low barriers to entry in the investment management industry.

Intensity Of Rivalry

The intensity of rivalry for Victory Capital Holdings, Inc. is high due to the highly competitive nature of the investment management industry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	48.56%
Debt Cost	8.57%
Equity Weight	51.44%
Equity Cost	8.57%
WACC	8.57%
Leverage	94.39%

11. Quality Control: Victory Capital Holdings, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Federated Hermes

A-Score: 7.7/10

Value: 5.9

Growth: 6.6

Quality: 8.0

Yield: 7.0

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

Ares Capital

A-Score: 7.3/10

Value: 6.7

Growth: 5.1

Quality: 8.0

Yield: 10.0

Momentum: 4.0

Volatility: 10.0

1-Year Total Return ->

Golub Capital BDC

A-Score: 7.1/10

Value: 6.7

Growth: 5.8

Quality: 7.9

Yield: 10.0

Momentum: 2.5

Volatility: 10.0

1-Year Total Return ->

Hercules Capital

A-Score: 6.7/10

Value: 6.0

Growth: 3.6

Quality: 6.8

Yield: 10.0

Momentum: 4.0

Volatility: 9.7

1-Year Total Return ->

Victory Capital Holdings

A-Score: 6.4/10

Value: 4.7

Growth: 6.7

Quality: 8.4

Yield: 6.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

FS KKR Capital

A-Score: 6.4/10

Value: 6.0

Growth: 4.4

Quality: 7.2

Yield: 10.0

Momentum: 1.5

Volatility: 9.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

0.30%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.57%

Victory Capital Holdings, Inc. - US92645B1035

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on VCTR

1.c. Company Highlights

Strong Momentum

Expensive

Higher Growth

Earnings Miss

Revenues Beats

Average Quality

Better Quality

Earnings Beats

Revenues Miss

Stable Momentum

Fairly Valued

Average Growth

2. Victory Capital's Q3 2025 Earnings: Strong Revenue Growth and Margin Expansion

Operational Highlights

Capital Allocation and M&A

Valuation and Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Investment Management Fees - Mutual Funds (Victory Funds)

Expected Growth: 5.0%

Investment Management Fees - Separate Accounts and Other Vehicles

Expected Growth: 5.0%

Fund Administration and Distribution Fees - Administration Fees - Mutual Funds (Victory Funds)

Expected Growth: 5.0%

Fund Administration and Distribution Fees - Transfer Agent Fees - Mutual Funds (Victory Funds III)

Expected Growth: 5.0%

Fund Administration and Distribution Fees - Distribution Fees - Mutual Funds (Victory Funds)

Expected Growth: 5.0%

Investment Management Fees - Exchange Traded Funds (Victory Shares)

Expected Growth: 5.0%

Investment Management Fees - Performance-based Fees - Mutual Funds (Victory Funds III)

Expected Growth: 5.0%

Fund Administration and Distribution Fees - Administration Fees - Exchange Traded Funds (Victory Shares)

Expected Growth: 5.0%

Investment Management Fees - Performance-based Fees - Separate Accounts and Other Vehicles

Expected Growth: 5.0%

7. Detailed Products

Institutional Asset Management

Retail Asset Management

US Equity

Fixed Income

Solutions Platform

Exchange-Traded Funds (ETFs)

8. Victory Capital Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Victory Capital Holdings, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

12.e Scoring ^Insights

12.f DCF ^BETA