Highlights

  • 36.93% one-year basic EPS growth, P/E of 19.64 and PEG of 0.63.
  • Second quarter net income was $139.4 million, against $58.7 million a year earlier.
  • Assets under management were $342.5 billion at June 30, 2026, against $298.6 billion.
  • The Board approved a $0.50 per share quarterly dividend on August 5, 2026.

Growth, P/E and PEG sit side by side at Victory Capital (NASDAQ:VCTR), an undervalued growth stock: basic earnings per share grew 36.93% over one year, the trailing twelve-month P/E ratio is 19.64 and the PEG ratio, on an expected basis, is 0.63, with shares trading at USD 111.94 on October 28, 2026, up 1.16%. In its latest disclosures, the San Antonio-based asset manager repriced its term loans on May 18, approved a regular quarterly cash dividend of $0.50 per share on August 5, and reported second quarter 2026 net income of $139.4 million.

Victory Capital Holdings is based in San Antonio, Texas, and incorporated in Delaware. It describes itself as a diversified global asset management firm with total client assets of $346.1 billion, including assets under management of $342.5 billion, as of June 30, 2026. It operates multiple autonomous Investment Franchises and a Solutions Platform, which together managed 189 investment strategies. Its products include mutual funds, exchange traded funds, separate accounts, alternative investments and a 529 Education Savings Plan, and it reports one segment.

Growth: Second Quarter Earnings, Revenue and Assets Under Management

Net income was $139.4 million for the second quarter of 2026 against $58.7 million a year earlier, and $251.5 million for the six months against $120.7 million. Basic earnings per share were $1.70 against $0.69, and diluted earnings per share were $1.68 against $0.68. For the six months, basic earnings per share were $3.04 against $1.61 and diluted earnings per share were $3.01 against $1.59.

Total revenue was $435.4 million against $351.2 million, up 24%, with investment management fees up 28%. The company said the Pioneer Investments business, acquired on April 1, 2025, affected the comparison. Adjusted EBITDA, a non-GAAP measure, was $242.7 million, or 55.8% of revenue, against $178.5 million, or 50.8%. Adjusted Net Income with tax benefit, also non-GAAP, was $182.9 million against $132.8 million.

Assets under management rose $32.6 billion, or 10.5%, from March 31, 2026, which the company attributed to market action of $28.5 billion and net inflows of $4.1 billion. Gross flows were $22.4 billion against $15.7 billion.

Valuation: P/E of 19.64, PEG of 0.63 and Cash Generation

The P/E ratio of 19.64 is measured on trailing twelve-month earnings, and the PEG ratio of 0.63 on expected growth. Cash provided by operating activities was $256.4 million for the six months against $74.5 million.

On the second quarter earnings call, Chairman and Chief Executive Officer David Brown described the company's share repurchases as a statement of conviction in the value of its stock and the strength of its free cash flow generation. He also said strategic acquisitions remain the primary use of capital, followed by returns to shareholders.

Repurchases, Dividends, Debt and Liquidity

The 2025 Share Repurchase Program authorizes up to $500.0 million of common stock through December 31, 2027, after an August 2025 increase from $200.0 million. The company purchased 1,079,187 shares under the program in the quarter, and $85.5 million remained available at June 30, 2026. Including shares surrendered for taxes, total purchases were 1,148,779 shares at an average $85.00.

The dividend approved August 5 is payable September 25, 2026 to shareholders on the September 10 register. Cash and cash equivalents were $70,126 thousand at June 30, 2026 against $163,690 thousand at December 31, 2025. Term loan principal was $977,613 thousand, and the $100.0 million revolving facility was undrawn. The May 18 repricing set interest at SOFR plus 1.75%, with a $2.0 million loss on debt extinguishment.

Disclosed Risks and Outlook

The company stated that its revenues and net income may decline if market values of its assets under management fall, and that dividend decisions may change at any time. Personnel compensation and benefits were $125.5 million, up 15.2%, and distribution and other asset-based expenses were $68.6 million, up 10.6%. It carried $53.2 million of estimated contingent consideration from the WestEnd Acquisition, with up to $80.0 million potentially payable, and reported that it is not party to any material legal proceedings.

On the call, management said the Pioneer integration is complete and the full $110 million of net run rate expense synergies has been realized. It updated its long-term adjusted EBITDA margin guidance from 49% to 50%, said it continues to expect an average fee rate of 46 to 47 basis points, and expects cash compensation to run in the low to mid-20s as a percentage of revenue.