Federated Hermes, Inc. (FHI) AI Stock Analysis

Federated Hermes, Inc. operates as a publicly owned investment manager offering financial services through its subsidiaries. Established in 1955 and based in Pittsburgh, Pennsylvania, the firm serves high net worth individuals, banking institutions, investment companies, pension plans, charitable organizations, and governmental entities. It manages diverse client-focused investment portfolios, including equity, fixed income, balanced, and money market mutual funds across global markets. Its fixed income strategies span mortgage-backed, U.S. Government, corporate, high yield, and municipal securities using fundamental and quantitative analysis. The company operates globally with offices in Pittsburgh, New York City, and London.

From FY2021 to FY2025, Federated Hermes increased annual revenue from $1.30B to $1.80B, representing a 5-year revenue CAGR of 4.5%. Over that period, net income grew from $270.3M in FY2021 to $403.3M in FY2025, with net margin improving from 20.8% to 22.4%. Gross margin widened from 59.1% in FY2021 to 67.9% in FY2025, while operating margin ended FY2025 at 28.5%. In the latest quarter ended June 30, 2026, quarterly revenue grew 18.3% year-over-year, and quarterly earnings rose 19.3% year-over-year. For the trailing twelve months, revenue totaled $1.93B with an operating margin of 27.7% and diluted EPS of $5.37.

As of June 30, 2026, Federated Hermes held $420.6M in cash and short-term investments against total debt of $451.9M, resulting in net debt of $31.3M. The company maintains a current ratio of 2.59, a debt-to-equity ratio of 0.36, and total shareholders' equity of $1.25B. In FY2025, operating cash flow reached $297.3M and capital expenditures were $2.8M, producing $294.6M in free cash flow. Cash allocation in FY2025 included $262.8M in share buybacks and $104.9M in dividends paid.

Federated Hermes trades at a trailing P/E of 10.4x and a forward P/E of 9.9x, compared to medians of 12.1x and 10.8x for its US-listed Financial Services peers. Its enterprise value to EBITDA ratio is 7.2x, below the peer median of 11.7x, while its price-to-sales ratio is 2.2x versus the peer median of 3.2x. Over the past year, FHI shares gained 12.1%, trailing the S&P 500 (SPY) return of 16.8%. Over five years, the stock returned 104.2% compared to 83.0% for SPY.

Federated Hermes pays a quarterly dividend with an annual forward payout of $1.44 per share, resulting in a dividend yield of 2.57%. The payout ratio stands at 26.8%, and the company has distributed dividends for 29 consecutive years. The 5-year annualized dividend growth rate was -8.6%. The company's last ex-dividend date was August 7, 2026.

Wall Street analyst coverage comprises 1 Strong Buy, 0 Buy, 6 Hold, 1 Sell, and 0 Strong Sell ratings. The mean price target is $58.86, representing a 5.2% upside from the last close of $55.93. For the fiscal year ending December 31, 2026, consensus estimates project revenue of $1.99B and EPS of $5.60. Federated Hermes has beaten EPS estimates in each of the last 4 quarters, with its next earnings release scheduled for October 29, 2026.

This page is an AI-written research summary of Federated Hermes, Inc. (FHI). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

Related: FHI income statement, FHI balance sheet, FHI key metrics, FHI analyst forecast, FHI chart. See the FHI stock overview for the latest quote and news.