Wealthfront (NASDAQ:WLTH) Shares Down 5.6% – Should You Sell?

Wealthfront (NASDAQ:WLTH) shares dropped 5.6% during mid-day trading on Wednesday . The company traded as low as $10.34 and last traded at $10.2590. 299,432 shares traded hands during mid-day trading, a decline of 81% from the average daily volume of 1,579,355 shares. The stock had previously closed at $10.87.

Trending Headlines about Wealthfront

Here are the key news stories impacting Wealthfront this week:

• Positive Sentiment: Platform assets increased 12% year over year to $99 billion during the fiscal second quarter and exceeded $100 billion by the end of August. Funded clients also grew 14% to 1.51 million, supporting Wealthfront’s long-term growth story. Wealthfront Tops $100 Billion in Platform Assets
• Positive Sentiment: Quarterly earnings of $0.10 per share exceeded the $0.09 consensus estimate, while revenue reached $91.87 million.
• Neutral Sentiment: The key investor concern is whether asset and client growth can translate into stronger revenue and profitability: quarterly revenue rose only about 1% year over year, while Wealthfront continued to report a negative net margin and negative return on equity. Wealthfront Earnings Call: Growth Strong, Margins Tested
• Negative Sentiment: Several executives and insiders reported stock sales, including the CFO, CTO, two vice presidents, another insider and a director. The transactions totaled roughly $1.34 million across the disclosed sales, creating a potential overhang and likely contributing to the stock’s recent weakness. However, most sales were made to cover tax-withholding obligations tied to vested equity awards, and the director’s sale occurred under a pre-arranged Rule 10b5-1 plan, which makes the transactions less indicative of broad-based loss of confidence. Wealthfront Insider Sale Filing

Wall Street Analyst Weigh In

Several research firms recently weighed in on WLTH. Wall Street Zen raised Wealthfront from a “sell” rating to a “hold” rating in a research report on Saturday, July 18th. The Goldman Sachs Group reissued a “neutral” rating and issued a $10.00 price target on shares of Wealthfront in a research report on Thursday, September 10th. Wells Fargo & Company decreased their price target on shares of Wealthfront from $12.00 to $11.50 and set an “overweight” rating for the company in a report on Tuesday, August 4th. Weiss Ratings reaffirmed a “sell (d)” rating on shares of Wealthfront in a research report on Monday, July 6th. Finally, Royal Bank Of Canada dropped their price objective on shares of Wealthfront from $13.00 to $11.00 and set an “outperform” rating on the stock in a research note on Thursday, September 10th. Four research analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, Wealthfront has a consensus rating of “Hold” and an average price target of $12.00.

Wealthfront Price Performance

The business has a 50 day simple moving average of $9.48 and a 200 day simple moving average of $9.70. The stock has a market cap of $1.58 billion and a PE ratio of -10.86.

Wealthfront (NASDAQ:WLTH) last announced its quarterly earnings results on Wednesday, September 9th. The company reported $0.10 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.09 by $0.01. The business had revenue of $91.87 million during the quarter. Wealthfront had a negative return on equity of 14.62% and a negative net margin of 19.42%.The company’s revenue for the quarter was up .9% on a year-over-year basis. As a group, sell-side analysts forecast that Wealthfront will post 0.41 earnings per share for the current fiscal year.

Insider Activity

In other news, CTO Julien Wetterwald sold 26,231 shares of the stock in a transaction on Tuesday, September 15th. The shares were sold at an average price of $10.73, for a total transaction of $281,458.63. Following the transaction, the chief technology officer owned 730,793 shares in the company, valued at $7,841,408.89. This represents a 3.47% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Alan Imberman sold 20,304 shares of the firm’s stock in a transaction on Tuesday, September 15th. The shares were sold at an average price of $10.73, for a total transaction of $217,861.92. Following the transaction, the chief financial officer owned 479,802 shares in the company, valued at $5,148,275.46. This represents a 4.06% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last 90 days, insiders have sold 153,705 shares of company stock valued at $1,603,880. 27.36% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Wealthfront

A number of large investors have recently bought and sold shares of WLTH. Whetstone Capital Advisors LLC lifted its position in shares of Wealthfront by 10.6% in the second quarter. Whetstone Capital Advisors LLC now owns 604,160 shares of the company’s stock worth $5,401,000 after buying an additional 57,753 shares during the last quarter. Squarepoint Ops LLC acquired a new position in shares of Wealthfront during the 2nd quarter valued at about $90,000. Arizona State Retirement System bought a new position in shares of Wealthfront in the 2nd quarter valued at approximately $102,000. AXQ Capital LP bought a new position in shares of Wealthfront in the 2nd quarter valued at approximately $105,000. Finally, ICONIQ Capital LLC acquired a new stake in Wealthfront in the 2nd quarter worth approximately $111,000.

Wealthfront Company Profile

Wealthfront, Inc is a U.S.-based digital wealth management company that provides automated investing, financial planning and cash management services through an online platform and mobile applications. The company is designed to help individuals manage their finances with technology-driven tools and diversified investment portfolios.

Its offerings have included automated investment accounts, tax-efficient portfolio management, financial planning tools, high-yield cash management products and lending services.