What Happened?
Shares of investment management firm T. Rowe Price (NASDAQ: TROW) fell 4.8% in the afternoon session after the company reported fourth-quarter 2025 financial results that fell short of analyst expectations.
The investment management firm posted revenue of $1.93 billion and adjusted earnings of $2.44 per share, both of which narrowly missed Wall Street's projections. While the company's assets under management (AUM) of $1.8 trillion slightly exceeded expectations, this positive was not enough to offset investor concerns about the top- and bottom-line misses. The overall softer-than-expected results prompted a negative reaction from the market, leading to the stock's decline.
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What Is The Market Telling Us
T. Rowe Price’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 5.6% on the news that the company announced a strategic collaboration with Goldman Sachs that includes a planned investment of up to $1 billion from the financial giant. As part of the agreement, Goldman Sachs intends to purchase T. Rowe Price's common stock through open-market transactions, aiming to acquire a stake of up to 3.5%. The partnership is designed to leverage the strengths of both firms to create a range of diversified investment solutions for retirement and wealth management clients. The collaboration will focus on developing products that combine public and private market offerings. The companies also plan to launch co-branded target-date investment strategies in mid-2026 that will incorporate private market assets.
T. Rowe Price is down 5.9% since the beginning of the year, and at $98.41 per share, it is trading 14.8% below its 52-week high of $115.55 from February 2025. Investors who bought $1,000 worth of T. Rowe Price’s shares 5 years ago would now be looking at an investment worth $613.01.
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